Russia lets us agree to help improve the roadside for food, fertilizer and transportation

Russia said Tuesday that the U.S. has agreed to help it lift a series of Western sanctions and restrict food, fertilizer and transport companies as a prerequisite for a Black Sea maritime security agreement.

Most of the curbs listed by the Kremlin are related to EU sanctions and restrictions, diplomats told Reuters.

Agreed reached – What still needs to happen to the deal to get into force?
What does Russia say will get?

* Removal of restrictions on the Agricultural Bank of China Rosselkhozbank “and other financial organizations involved in ensuring international trade in food (including fish products) and fertilizers, ties with Swift and opening necessary communication accounts”.

*Remove curbs in trade financing actions. *Eliminate sanctions and restrictions on companies that produce and export food (including fish products) and fertilizers. *Remove sanctions and restrictions on insurers that include goods (including fish products) and fertilizer goods. Russian Foreign Minister Sergei Lavrov specifically mentioned Lloyd of the London insurance market.

* Release restrictions on port ship maintenance and sanctions on Russian logo ships involved in food and fertilizer trade.

* Release restrictions on the supply of Russian agricultural machinery, “and other commodities involved in food production (including fish products) and fertilizers.”

Where did this deal come from?

The White House said it has agreed to Russia to ensure safe navigation, eliminate the use of force and prevent the use of commercial vessels in the Black Sea for military purposes, but Washington has not called it the “Black Sea Initiative” like the Kremlin did.

The deal is actually a return to the Black Sea Initiative, which was conducted in 2022 with the help of Türkiye and the United Nations. The deal helped Ukraine bring its cereals and other agricultural products to market, while allowing inspections of transport in the region to prevent weapons supply. Kief complained that Russia is using inspections to lift the goods, an allegation Moscow denied.

Crucial for Russia, it includes many conditions that accompany the three-year memorandum of understanding, in which UN officials agreed to help Russia export its food and fertilizers to foreign markets.

Russia withdrew from the Black Sea Initiative in 2023, complaining about serious obstacles in its food and fertilizer exports, although Moscow has not yet faced serious problems, about to enter its cereals through the Black Sea.

Lavrov said Russia and Türkiye then agreed to return to the deal, but Ukraine suddenly withdrew.

so what?

Although Russia’s food and fertilizer exports are not subject to Western sanctions, Moscow said restrictions on payments, logistics and insurance constitute obstacles to goods.

Despite this, Russia remains the world’s tallest exporter of wheat and fertilizers. Russia is expected to send about 40 million tons of wheat to global markets this season, mainly to the Middle East (such as traditional customers such as Egypt) and aims to increase its overall agricultural exports by 50% by 2030.

Last year, Russia also exported about 40 million tons of mineral fertilizers with Brazil, India, China and the United States as its main buyers. The country plans to increase fertilizer production by one third to 80 million tons by 2030.