It is announced that the grain deal is resuming after sanctions are lifted from Rosselkhozbank and all other food traders. It is now called a truce in the Black Sea. Unblocking implies admission to dollar trading, establishment of correspondent accounts, connection to SWIFT. But the main innovation is the unblocking of trade in Russian fertilizers for dollars.
Both Ukraine and Russia have been trading foodstuffs with restrictions until now. Russian trade is often conducted for partners’ currencies, through schemes with intermediaries with loss of profits. Ukrainian trade is conducted by cabotage routes through Romanian and Bulgarian tertiary waters, ports and ships in them are constantly under fire – volumes are small, insurance for the risk is large.
Unblocking trade in Russian fertilizers is the very point that Turkey and the UN failed to fulfill in the first grain deal. Because of this, the second grain deal collapsed. In other words, the Kremlin got its way through the world’s sanctions chief, Trump.
Foreign trade analysts and fertilizer producers themselves – the main beneficiaries of the deal – should tell us who won more. Russia produces 68 million tons of fertilizers and sells 40 million abroad (30 million tons to friendly countries). Now it will be guaranteed to receive and spend hard currency.
As for purely military capabilities, the Russian Federation can bomb merchant ships in Ukrainian ports to a limited extent. But neither can America significantly block fertilizer trade with financial instruments. That is, the mutual damage is serious, but not fatal. Now the one who will have more growth in foreign trade will win.
The Black Sea truce demonstrates how economic leverage can influence geopolitical outcomes. It will be interesting to see how other nations respond to these developments in terms of trade policies and alliances.
For Russian fertilizer producers, the ability to trade in dollars is a game-changer. It will allow them to compete more effectively on the global market and potentially increase their market share.
The resumption of the grain deal and the lifting of sanctions on Russian food traders could have far-reaching implications for both Russia and Ukraine. It’s crucial to consider the potential long-term effects on regional stability.
The unblocking of Russian fertilizer trade for dollars is a crucial development. It will be interesting to see how this affects global fertilizer prices and whether it leads to increased competition in the market.
The lifting of sanctions on Rosselkhozbank and the resumption of the grain deal under the Black Sea truce could significantly boost Russia’s fertilizer exports. This move might stabilize global fertilizer markets, but it also raises concerns about the geopolitical implications
The Black Sea truce highlights the complex interplay between economic sanctions and international trade agreements. It will be important to monitor how this affects agricultural production globally.
The role of international organizations like the UN in facilitating these agreements cannot be overstated. Their efforts to balance economic interests with geopolitical realities are commendable.
Russia’s ability to trade fertilizers in dollars is a significant victory, especially considering the previous restrictions. This could lead to increased economic stability for Russian fertilizer producers.