The Times - UK (2022-05-28)

44 2GM Saturday May 28 2022 | the times

Wo r l d

When President Putin began his war,
he did so in the hope of subsuming
Ukraine and dividing the West. So far,
however, his biggest gain to speak of
has come in the form of wheat.
Russia’s blockade of ports along the
Black Sea has not only placed a
stranglehold on Ukraine’s economy but
also hobbled a key competitor in the
world grain market.
More than 20 million tonnes of
Ukrainian grain is rotting in silos and
commercial vessels around the coun-
try, unable to reach its destination.
Ukraine is the fifth-biggest exporter
of wheat and the blockade has sent the
price up by 60 per cent since the start of
the year, to a near-record high.
Russia, the world’s top wheat export-
er, has been only too happy to fill this
gap, selling not only more of the com-
modity but at a higher price. President
Zelensky has said that Russia is also
attempting to sell grain stolen by its
soldiers from farms in occupied
regions.
Last month, as Ukraine’s wheat
exports fell by 32 per cent compared
with April last year, Russia’s rose by

18 per cent, according to AgFlow, an
agriculture market analysis company.
The Russian Treasury is estimated to
have collected $1.9 billion in revenues
from wheat export taxes this season.
The blockade has been devastating
for Ukraine, which earns about 10 per
cent of its GDP through the food and
agriculture sector. The sector accounts
for about 5 per cent of Russia’s GDP.
“Before the war, Ukrainian wheat
and corn exports were growing,
whereas Russian exports were declin-
ing. Since then though, they have sky-
rocketed,” Nabil Mseddi, chief execu-
tive of AgFlow, said. “The loss in
Ukraine’s export volumes matches
almost exactly Russia’s gain. It there-
fore could be interpreted quite accu-
rately as sidelining of a trade rival.”
The two countries share many of the
same export partners, located for the
most part in north Africa and the Mid-
dle East. Faced with the possibility of
food shortages, many are turning to
Russia to make up the shortfall. Egypt,

Cost of wheat

Daily price per bushel

2018 2019 2020 2021 2022

0

2

4

6

8

10

£12

£9.18

Source: Refinitiv

Feb 24

Russian

invasion

One of America’s biggest

intelligence agencies has recruited

three commercial satellite

companies to help spy on Russian

military activities in Ukraine.

The National Reconnaissance

Office (NRO), which has at least

50 intelligence-gathering satellites,

has signed a multibillion-dollar

deal with companies that have

been leading the field in exposing

Russian actions in Ukraine,

including the plundering of vital

grain exports.

Images from NRO and

commercial satellites have played

a crucial role in helping the

Ukrainians plot counterattacks

against the invader, revealing to

the world the actions taken by

Russian forces since February 24.

Maxar Technologies, awarded a

ten-year contract by the NRO

worth $3.24 billion, produced

satellite images this week which

showed two Russian-flagged cargo

ships, the Matros Pozynich and

Matros Koshka, loading up with

Ukrainian grain at the port of

Sevastopol in Crimea.

The two other US companies

contracted by the NRO are

BlackSky, based in Herndon,

Virginia, and Planet Technology,

in San Francisco.

All three private companies

operate fleets of satellites and have

played an increasingly influential

role in detecting Russian missile

positions and troop movements,

with the Pentagon and the NRO

coming to rely on the images.

The commercial satellites,

smaller and cheaper, are able to

exploit the revolution in new

technology. “The NRO has a

longstanding strategy of buy what

we can, build what we must,” Chris

Scolese, the NRO director, said.

US pays for

eye in the sky

Michael Evans

Russia is winning

battle to control

the world’s wheat

Iran and Turkey have been the biggest

buyers, with Russian exports to those

nations surging by 500, 481 and 381 per

cent respectively.

While the Kremlin swells its coffers,

as many as 50 million people around

the world are at risk of starvation,

ccording to the World Food Pro-

gramme,which is part of the UN.

Ursula von der Leyen, the president

of the European Commission, said this

week that Russia was “using hunger

and grain to wield power”.

Talks are under way in Ankara to

open a “humanitarian corridor” for

grain shipments through the Black Sea,

and there have been suggestions that

Nato ships might escort cargo vessels.

Putin, however, has sought to blame

western sanctions for the crisis, saying

that he would consider lifting the

blockade only in exchange for a relaxa-

tion of the embargos. Dmytro Kuleba,

Ukraine’s foreign minister, told Davos:

“You could not find a better example of

a blackmail in international relations.”

Russia’s ability to hold the grain

market to ransom marks a remarkable

turnaround of its agricultural sector

over the past 20 years. For much of the

second half of the 20th century the

country relied hugely on imports from

North America. In 1999, the year before

Putin became president, Russia had a

trade deficit for wheat of $354 million.

Increasing production to reach self-

sufficiency was one of the new presi-

dent’s key priorities, and by 2002 the

country had become a net exporter,

selling $884 million of wheat each year.

By 2017 Russia had overtaken the US

and Canada to become the biggest

exporter of wheat, selling just over

$8 billion worth. It is not a coincidence

that this ascent occurred after the an-

nexation of Crimea in 2014, when

Russia was hit by western sanctions.

Agriculture remained one of the few

sectors not under sanctions and thus

provided key sources of foreign capital,

as well as a tool to wield influence over

importer nations, Caitlin Welsh, direct-

or of global food security at the Centre

for International and Strategic Studies,

said. “The West very deliberately didn’t

sanction Russian agriculture as it

would be far more harmful for those

countries that rely on Russian wheat,”

she said. “When the Kremlin says that

the food crisis is being caused by west-

ern sanctions that is entirely untrue as

agriculture is not under sanction.”

As a measure of the importance with

which Putin views grain to the future of

the Russian economy, he has appointed

the son of one of his closest allies as his

agriculture minister. Dmitry Patrush-

ev, whose father is Nikolai Patrushev,

secretary of the security council and a

former FSB director, has been tasked

with adding another 50 per cent to the

value of agricultural exports by 2024.

The right course is to help Kyiv win,

leading article, page 33

Russia
Tom Ball

A cargo ship is loaded with grain in

Crimea, which Russia seized in 2014

S

moke could be

seen rising

yesterday over

Lysychansk, the

last town on

the road into

Severodonetsk, a key

target for the Russians

(Richard Spencer

writes).

In the surrounding

valley puffs of white

vapour rose from the

Ukrainian artillery

positions, hidden in

the clumps of trees

that line the route.

“We have pushed the

Russians back,” said

the officer guarding

the last checkpoint

before the road

descends into the

Severodonetsk pocket,

now just ten miles

from being cut off and

surrounded by the

invaders. “We can

travel down it, but it is

under shellfire, and

they are so close they

can hit the vehicles

with sniper fire and

even rifle fire, let

alone artillery.”

The T1302, an

unremarkable B-road

heading north, is the

main supply line to

Severodonetsk and

Lysychansk, the only

towns in the pocket

still under Ukrainian

control in Luhansk.

The Russians are

applying a pincer from

either side. They failed

to establish a crossing

over the Severskyi

Donets river to the

northwest of here,

losing hundreds of

men in the process,

but on the east side

they have advanced

from the town of

Surrounded, but

Ukraine will fight

to bitter end in east