Turkey’s grain deal

Karam Said, Tuesday 2 Aug 2022

On Monday the first ship carrying Ukrainian grain passed through Turkish waters as agreed last month, reports Karam Said

Turkey s grain deal
The bulk carrier Razoni starts its way from the port in Odessa, and is expected to reach Istanbul on Tuesday, where it will be inspected, before being allowed to proceed (photo: AP)

 

Turkey has become the key actor in the efforts to resolve the blockage of Ukrainian grain exports. On 22 July, it hosted the signing ceremony of a UN-sponsored agreement between itself and the two warring states to guarantee the safe passage of grain and foodstuffs from three ports in the Odessa area through Turkish waters to the rest of the world. The initiative promises to ease the global food crisis that has loomed since the Russian invasion of Ukraine.

The Ukrainian grain crisis presented Turkey with an opening to assume a new role, not just as a diplomatic mediator but as a guarantor for the safe passage of grain shipments. All ships will pass through Turkish waters, and a joint coordination centre (JCC) has been established in Istanbul to oversee safety procedures and inspections. Turkey will thus become a hub for grain shipments to destinations beyond the Black Sea. It may also be in a position to set global grain prices and, indeed, to establish a grain and cereal stock market in Istanbul.

The escalation of the Ukrainian crisis after efforts failed to promote a diplomatic settlement has thrown international grain markets into havoc, raising the spectre of a global food crisis. Countries across Africa and Asia are heavily dependent on grain imports from both Ukraine and Russia. In 2021, the two counties accounted for 21 per cent of worldwide wheat exports while Ukraine contributed more than 11 per cent of total corn exports that year. The outbreak of the conflict in February interrupted indispensable grain supplies from both countries.

Turkey, which is also dependant on Ukrainian and Russian grain supplies and other foodstuffs, seized the advantage of its good relations with both Kyiv and Moscow to advance itself as a mediator. There are many reasons it should be eager to do this, accepting the UN proposal to establish a joint coordination centre headquartered at the National Defence University in Istanbul. Firstly, it is crucial to alleviating the economic fallout of the war on the Turkish economy. The Russian-Ukrainian conflict aggravated the already ailing Turkish economy which has seen sharp rises in the prices of fuel and other commodities, including foodstuffs. According to the Turkish Ministry of Trade, Ukraine is the second largest grain exporter to Turkey after Russia. Some 22 per cent of Turkish wheat imports come from Ukraine.

Inflation in Turkey climbed to 70 per cent by the end of May as a result of the halt in Ukrainian grain exports. The disruption exacerbated existing supply chain deficiencies, causing a 13 per cent hike in food prices by the end of May. Food prices had been steadily rising before this. By the end of May, they were 107 per cent higher than at the same time last year. Turkey, along with many other countries dependent on Ukrainian and Russian grain, would have naturally breathed a sigh of relief at its successes in facilitating the resumption of Ukrainian shipments through the Black Sea and the Bosphorus.

Secondly, the grain crisis has presented Ankara with a diplomatic instrument to bolster its regional and international standing, neutralising Western pressures in relation a range of controversial issues. Turkey realises that its mediating efforts to facilitate the resumption of Ukrainian agricultural exports that are of strategic importance to Western countries, such as plant oils, will soothe tensions with Europe, which have steadily mounted during the foregoing year. The most salient bone of contention has been Turkey’s human rights record. On 7 June, the EU parliament plenary adopted the 2021 EU Commission Report on Turkey which observed the continued deterioration of the human rights situation and the decline in basic freedoms, democracy and rule of law in Turkey. The parliament cautioned that without significant reforms in these areas, they can not envisage resuming accession negotiations with Turkey. With regard to Ankara’s relations with Washington, its successes in promoting a breakthrough in the Ukrainian grain crisis serve to offset US pressures regarding the question of Finland and Sweden’s accession to NATO and Ankara’s refusal to adhere to the Western-imposed sanctions regime against Russia.

Thirdly, Turkey believes that it might also be able to leverage its newfound position as a hub for Ukrainian grain exports into political and economic gains from both sides of the conflict. For example, Ankara might calculate that by using its influence to reduce international pressures on Russia, the latter might turn a blind eye to a potential Turkish military incursion into northern Syria.

Despite the general relief at the UN-sponsored agreement, with the ongoing conflict in Ukraine, the situation is not without challenges. A tangible case in point is the Russian insistence on linking the agreement on the safe passage of Ukrainian grain to the lifting of Western-imposed restrictions on Russian grain and fertiliser exports. Another problem involves the concerns of shipping and insurance companies fearful of mines, possible attacks against ships and crews, and other such risks that come with the ongoing state of war and animosity between Moscow and Kyiv. Ukraine still refuses to clear the mines it laid in the port of Odessa in order to prevent a Russian naval assault on the port. Moscow, for its part, wants to ensure that the ships used to transport grain out of Ukraine are not used to bring weapons back into Ukraine. In the context of the mutual recriminations between the two countries, Moscow has claimed that there is no real obstacle to the export of Ukrainian grain and accused the West of artificially creating the crisis as a means to rally international sympathy against Russia.

Another challenge stems from Kyiv’s doubts regarding Turkey’s ability to fulfil its functions as the mediator and facilitator of the deal. The scepticism was voiced by the acting director of the Ukrainian Grain Association Sergii Ivaschenko on 8 June when he said, “Turkey does not have enough power in the Black Sea to guarantee the security of Ukrainian goods and ports.”

Regardless of the many possible ways Turkey stands to gain from serving as the linchpin in mechanisms to resolve the Ukrainian grain crisis, its gains will remain contingent on its ability to fulfil those functions effectively and, above all, on the ongoing commitment of the two other parties to the agreement.

*A version of this article appears in print in the 4 August, 2022 edition of Al-Ahram Weekly.

Search Keywords:
Short link: