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WATCH: Putin’s grain threat
Putin said a wartime deal to facilitate Ukrainian grain shipments that is critical for the world’s food supply will not resume.
Russian President Vladimir Putin spoke virtually at the Brics Summit at Sandton Convention Centre in Johannesburg. Picture: Sputnik/Reuters
Russian President Vladimir Putin has hit out at Western nations on the opening day of the Brics summit in South Africa, warning about disruptions to grain exports if sanctions are not lifted.
Putin was speaking virtually at the gathering held at Sandton Convention Centre in Johannesburg.
More than 40 heads of states are attending the summit that started on Tuesday and will end on Thursday.
Putin did not appear in person at the summit due to an arrest warrant issued against him by the International Criminal Court for Russia’s invasion of Ukraine.
Watch the address by Russian President Vladimir Putin
“Illegitimate sanctions”
During his 17-minute speech, Putin slammed what he called “illegitimate sanctions” on Russia and threatened to cut off grain exports permanently.
“These challenges are complex tasks [that] have to be dealt with amid the volatility in stocks, currency, energy and food markets coupled with strong inflation pressure stemming from irresponsible large-scale money emission by a number of countries seeking to mitigate the effects of the pandemic, which has led to the accumulation of private and public debt,” Putin said.
“International economy is also seriously affected by the illegitimate sanctions practice and illegal freezing of assets of sovereign states which essentially amounts to the tramping upon of all the basic norms and rules of free trade and economic norms and rules that not so long seemed immutable.”
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Putin said a wartime deal to facilitate Ukrainian grain shipments critical for the world’s food supply would not resume until his conditions − the easing of restrictions on Russian food and agricultural products − are met.
“With these facts in mind, since 18 July we have refused to extend the so-called deal. We will be ready to get back to it, but only if all the obligations to the Russian side are truly fulfilled.”
Putin said that the conflict between Russia and Ukraine had sent grain prices skyrocketing and this had disproportionately affected poor countries.
“I have repeatedly said that our country has the capacity to replace Ukrainian grain, both commercially and as free aid to needy countries, especially since our harvest is again expected to be perfect this year.”
Is SA affected?
In July, Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa (Agbiz), said South Africa is not directly at risk as it has large domestic grain supplies, although the country still imports about 1.5 million tons of wheat annually. Fortunately, most of the imports for the 2022/23 season are already in the country.
“One has to appreciate that the major contributor to the slowing global agricultural commodities prices (food prices) was the Black Sea Grain Deal. Russia’s refusal to renew the Black Sea Grain Deal presents an upside risk to global grain prices, which may undermine the gains we were all starting to enjoy from the slowing grain prices, specifically in the major importing regions,” said Sihlobo.
De-dollarisation
Putin also told the summit the process of de-dollarisation in settlements between the Brics countries is irreversible.
“A balanced, irreversible process of de-dollarisation of our economic ties is gaining steam, with efforts undertaken to develop efficient mechanisms of mutual settlements, as well as monetary and financing control.
“As a result, the share of the dollar in export and import transactions within Brics is declining as it only equalled 28.7% last year,” said Putin.
ALSO READ: SA not directly at risk as Russia ends grain deal, price reaction possible
