Putin says may walk out of Black Sea grain deal if demands not met

Russian President Vladimir Putin said July 13 that Russia may withdraw from the Black Sea grain deal if its demands are not fulfilled. The Black Sea grain deal is scheduled to expire on July 17.

"What I mean is we can suspend our participation in this transaction. If everyone once again says that all the promises to us will be fulfilled -- well, let them fulfill this promise, and we will immediately join this deal again," Putin said in an interview to Russian state television.

The UN and Turkey brokered the Black Sea Grain Initiative between Russia and Ukraine in July 2022 to ensure food supplies through the Black Sea that were stranded following Russia's invasion of its neighbor. The deal was last renewed for 60 days on May 18.

Russia has said that it may not extend the agreement beyond July 17 unless a series of its demands, including the removal of obstacles to Russian grain and fertilizer exports, are met. The deal allows for the safe export of ammonia from Russia via Ukraine, apart from food items. However, so far ammonia has not been exported under the initiative.

Russia has been asking for the resumption of ammonia supplies through a pipeline across Ukraine to the Black Sea port of Odesa that has been idle since 2022. Putin has also added that functioning of the initiative has been "a one-sided game."

"There were clauses of this agreement with the UN, according to which it was necessary to take into account Russian interests. Nothing, I want to emphasize this, nothing was done at all," Putin added. "We will think about what to do, we have a few more days," he added.

Putin has also added that he has not seen the letter sent by UN Secretary-General Antonio Guterres earlier this week proposing ways to continue the Black Sea grain deal beyond July 17.

Any stoppage of exports under the deal may impact global supplies of wheat and corn. In the marketing year 2023-24 (July-June), Ukraine and Russia together were expected to account for nearly 27% of global wheat trade, and Ukraine may supply almost 10% of global corn shipments, showed data from the US Department of Agriculture.

Platts, part of S&P Global Commodity Insights, assessed Russian 12.5% FOB wheat at $229/mt, and Ukrainian 11.5% FOB wheat at $202/mt on July 12, both down $2/mt on the day. Platts assessed Ukrainian FOB corn unchanged on the session at $194/mt July 12.