Miller Magazine Issue: 152 August 2022

MARKET ANALYSIS 97 MILLER / AUGUST 2022 The grain deal in Istanbul today represents a sig- nificant about-face from a few weeks ago when it appeared that the Kremlin was set to continue its blockade of Ukrainian ports in the Black Sea. What may have altered Putin's reasoning, and is he being sincere? The prohibition on Ukrainian grain exports according to Al- exander Gabuev, a senior fellow at the Carnegie Endowment for International Peace, had two objectives: 1) Economic stran- gulation, denying Kyiv a significant source of financial flow; 2) Increasing pressure on the West by creating a crisis (refugee flow from the MENA, etc.) and then blaming sanctions. This strategy has frightened Russia's allies in the MENA region, including diverse players like Turkey, Egypt, Saudi Arabia, Israel, and Iran, among others, who would have been negatively impacted politically and economically if flows of grain and fertiliser were considerably reduced. The com- munication between Moscow and the regional capitals has included both announced (Lavrov's trip, Putin's phone calls, etc.) and undisclosed signals that the food crisis may have huge repercussions for the entire area and that instability can reach Russia as well. The requests from important MENA partners, especially Turkey, which now acts as the main for- mal and informal channel to connect sanctioned Russia to the outside world, including diplomacy, trade, money, and even yachts, are largely to blame for Moscow's U-turn on the grain problem. Elena Faige Neroba Business Development Manager Maxigrain Trade grain, not headlines