Explainer: What’s up with the ‘grain deal’ and Russia?

agricultural exports, Fesenko said.

Volodymyr Dubrovsky, chief economist at think-tank CASE Ukraine, argued that it is part of Russia’s strategy of damaging and “smothering” Ukraine’s economy. 

What risks does Russia’s withdrawal pose? 

Even during the four days between Russia’s withdrawal from the deal and its return to it, ships continued to transport grain from Ukraine. 

However, Russia’s Defense Ministry said on Oct. 31 that it cannot guarantee the safety of the grain corridor, prompting speculation that Russia may deliberately carry out attacks to disrupt the exports. 

Fesenko believes Russia is unlikely to attack ships with grain, which would be grounds for a new round of sanctions and would hurt Russia’s relations with Turkey. However, “any stupid or evil action can be expected from Putin” nonetheless, he added. 

Fesenko said that Russia may hit Ukrainian ports or stage some provocations to block grain exports. 

Since Ukraine was one of the world’s leading grain exporters, the reduced grain supply resulted in soaring food prices globally and prompted fears of a major famine in developing countries. 

But Dubrovsky said that a global famine is unlikely because Ukraine’s share of the world’s grain supply is not big enough. 

How important is the deal for the Ukrainian economy? 

Since the grain deal was concluded, Ukraine has exported 12.9 million tonnes of grain, according to Ukraine’s Agricultural Policy and Food Ministry. Ukraine’s grain exports are worth about $1 billion a month, Dubrovsky said. 

Ukraine is unlikely to export a significant amount of grain in any other way. There is little capacity to transport grain by rail or road, Dubrovsky said. 

Fesenko added that grain exports are very important for Ukraine because they are “the main source of foreign currency” for the country.

But Dubrovsky said they are “important but not vital.”

Ukraine's budget deficit is $4-5 billion per month, and foreign partners cover about $3-4 billion of this amount and may be persuaded to cover more, according to Dubrovsky.

“(The disruption of the deal) will not kill the Ukrainian economy,” he said.