A U.S.-brokered Black Sea security agreement between Russia and Ukraine is unlikely to significantly increase Russian food exports in the near term, analysts say, despite claims from Moscow and Washington that the pact will bolster global food security. While the deal eases maritime attacks and sanctions, Russia’s agricultural shipments—already at record highs during the Ukraine war—face greater constraints from domestic export caps than Western sanctions.
Key Insights:
Short-Term Reality:
Russian grain and fertilizer exports hit 55 million tons in 2023/24 despite sanctions, with traders circumventing restrictions through “friendly” markets.
Current exports are capped at 40 million tons for 2024/25 to curb inflation, not sanctions.
“Exports will continue as they have—no immediate surge,” said Andrey Sizov of Sovecon.
Long-Term Goals:
The deal aligns with Putin’s 2030 vision to boost agricultural exports by 50%, targeting Asia, Africa, and Latin America.
Russia seeks SWIFT access for Rosselkhozbank (its top agricultural bank) and U.S. help resolving payment bottlenecks.
Challenges Ahead:
Sanctions as Nuisance: Traders navigate restrictions, but payment delays and shipping insurance hurdles persist.
Inflation Control: Russia prioritizes domestic food prices over export revenues, slashing wheat quotas despite global demand.
Global Context:
Agricultural exports are Russia’s second-largest revenue source after oil/gas, critical as energy sanctions bite.
The U.N. hailed the deal as a “crucial step” for food security, but analysts note existing trade flows remain uninterrupted.