Russia says it will not go ahead with grain deal if its demands are not met

by Michelle Nichols and David Ljunggren

UNITED NATIONS (Reuters) – Russia said on Thursday it would not extend a Ukrainian grain export deal beyond July 17 if its demands on Russia’s grain and fertilizer exports were not met.

Russia has previously indicated that barriers to its own agricultural exports must be removed before allowing Ukraine to continue exporting grain from its Black Sea ports.

Moscow claims restrictions on the payments, logistics and insurance sectors are a “hindrance” to its shipments.

It appears that Russia is now prioritizing two demands: the restarting of a pipeline carrying Russian ammonia to the Ukrainian port of Pivdeny, and the return of the Russian Agricultural Bank (Roselkhozbank) to the SWIFT international banking system.

In a statement issued by the Russian Foreign Ministry, “If Rosselkhozbank does not return to the SWIFT system and there is no progress on other ‘systemic’ issues that hold back our agricultural exports, the Black Sea Grain Deal will have to look for alternatives.” ” Thursday.

Last year, in an effort to induce Russia to allow Ukraine to resume grain exports via the Black Sea, a three-year agreement was also struck in July under which the United Nations would provide Russia with food and fertilizer supplies. agreed to help with the export.

As part of the deal, and as an alternative to Rosselkhozbank’s return to the SWIFT international banking system, US bank JPMorgan Chase & Co processed some payments related to Russian grain exports, sources told Reuters last month.

JPMorgan Chase & Co. could deal with other transactions, but Moscow considered this solution insufficient in the long term.

The deal also provides for ammonia exports, but the pipeline used by Russia to transport the roughly 2.5 million tonnes of ammonia it exports each year through the Ukrainian port of Pivdeny has not restarted.

A Ukrainian government source told Reuters on Friday that Kiev would consider allowing Russian ammonia to transit through its territory if the Black Sea grain deal was extended to other Ukrainian ports and covered more cargo.

(Reporting by Michel Nicolas Ray David Ljunggren; French edition by Camille Renaud)