(Bloomberg) — Russian President Vladimir Putin said he was open to discussing grain exports with Turkey’s Recep Tayyip Erdogan, who is pushing to revive a deal that would allow Ukraine to ship its crop through the Black Sea and ease concerns over global food security.
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Erdogan is visiting Putin in the Russian resort town of Sochi, hoping to come away with a new framework for negotiations that he can present to global leaders at the Group of 20 Summit in India later in the week.
The Turkish leader said he expected Monday’s talks to yield a “very important” message for African nations concerned grain prices may rise again. But it wasn’t clear if that announcement would involve a revamped Black Sea safe corridor from Ukraine or a separate plan to ship a much smaller volume from Russia itself.
Uncertainty about the future of supplies from one of the world’s largest grain exporters has contributed to weeks of volatility in global wheat prices, as has the surge in hostilities in and around the Black Sea.
Russia launched waves of drone attacks on the southern Odesa region in the leadup to the talks, damaging storage and industrial facilities as well as agricultural equipment. It also targeted two river ports that are the main alternative export routes to the Black Sea.
A mid-sized power that’s maintained strong ties with both Putin and the West, Turkey helped broker the original Black Sea Grain Initiative in July 2022, allowing Ukrainian cargoes to return to global markets upended by Russia’s invasion.
But the arrangement, a rare diplomatic success in an otherwise grinding war, was fragile from the outset and Ukraine’s grain exports were repeatedly disrupted by slow ship inspections and political tensions.
Russia exited the agreement and closed the safe corridor in July, complaining that its own demands for better trade terms had been ignored.
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President Volodymyr Zelenskiy’s deputy chief of staff told Bloomberg TV on Monday that his country was depending on Turkey to support the restoration of the grain deal and was ready to export to poor nations in Africa and Asia.
“The crops in Ukraine this year are quite good. So we are ready,” Ihor Zhovkva said. “The world is suffering when Russia is using aggressive instruments in the food security area.”
All that’s raised the stakes for Erdogan’s latest diplomatic effort, one further complicated by the practicalities of US and European sanctions.
Russia has demanded the removal of obstacles to its exports of food and fertilizer, some of which were hit immediately after it invaded Ukraine as banks, insurers and shipment companies steered clear of Russian goods and Baltic nations ceased handling Russian volumes through their ports. That hasn’t stopped Russia exporting record volumes of wheat, and its fertilizer exports are also recovering to pre-war levels.
Russia also wants to reopen an ammonia pipeline that traverses Ukraine and reconnect Rosselkhozbank, a state-owned lender focused on agriculture, to the SWIFT system for international payments. It has said it wouldn’t reopen the trade corridor unless its conditions were met.
The United Nations, which was instrumental in securing the original deal, has worked closely with private-sector banks and insurance providers to try to address Russia’s concerns. UN Secretary-General António Guterres recently sent Moscow a revised proposal he said could form the basis of a revamped deal.
It remains to be seen if the new terms will be enough to break the impasse.
“We cannot have a Black Sea Initiative that moves from crisis to crisis, from suspension to suspension,” Guterres told reporters in New York Thursday. “We need to have something that works and that works to the benefit of everybody.”
A Qatar-Financed Proposal
Ukrainian crops will still make it to market if a Black Sea deal eludes Erdogan, but higher transport costs could depress the next grain plantings soon underway — curtailing global supplies longer term.
Meanwhile, Russia has proposed an arrangement that would see 1 million tons of Russian grain sold at a preferential price to Turkey, already a major Russian buyer, where it could be processed and shipped onto countries in need. That deal, which would come with the added offer of financial support from Qatar, was discussed at a recent meeting of Russian and Turkish foreign ministers.
However, one million tons pales in comparison to Russia’s total exports, which are expected to be around 48 million tons this season, according to consultant SovEcon. It’s also tiny compared to the volumes of Ukrainian grain that were previously shipped via Black Sea ports until Russia’s exit from the grain deal forced Ukraine to export via alternative routes.
Ukraine’s Foreign Ministry has warned against any agreement that would facilitate Russian exports without easing Ukraine’s maritime access, saying that would only “encourage Moscow to continue its aggressive actions.”
That leaves Erdogan with much to grapple with at his meeting with Putin, who is not expected to attend the G-20 meeting. The two men have maintained extensive contacts since Russia’s invasion of Ukraine in 2022, collaborating on plans to expand gas imports and nuclear energy cooperation.
Read more: Russia Plan for Turkey’s Gas Hub Is Still on Agenda, Putin Says
Erdogan said in his opening remarks that he hopes “there will be a step” on Turkey’s ambitions to build a second nuclear power plant in Sinop on the Black Sea coast.
–With assistance from Áine Quinn and Daryna Krasnolutska.
(Releads with Putin comments, adds Erdogan comment in third paragraph.)
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