Turkey’s Erdogan holds talks with Putin in Russia on grain deal, gas

Turkish President Recep Tayyip Erdogan met Kremlin chief Vladimir Putin in Russia’s Black Sea resort of Sochi on Monday, aiming to persuade him to return to a Ukraine grain export deal that helped ease a global food crisis.

Russia quit the deal in July – a year after it was brokered by the United Nations and Turkey – complaining that its own food and fertilizer exports faced obstacles and that not enough Ukrainian grain was going to countries in need.

Putin told Erdogan they would discuss the Ukraine crisis and that Moscow was open about discussions on the grain deal.

Erdogan previously played a significant role in convincing Putin to stick with the deal.

“We are cautious, but we hope to achieve success,” Erdogan’s chief foreign policy and security advisor Akif Cagatay Kilic said in an interview on A Haber television channel.

Erdogan’s top economic policymakers are visiting Russia for meetings on Monday, a Turkish official who requested anonymity told Reuters. Finance Minister Mehmet Simsek and Hafize Gaye Erkan, the central bank governor, will attend meetings.

Putin told Erdogan things were moving ahead in the energy sphere with Turkey and Erdogan said talks between the two countries’ central banks would be important.

The grain deal was aimed at getting grain from Ukraine to world markets through the Black Sea and easing a global food crisis that the United Nations said had been worsened by Russia’s full-scale invasion of Ukraine in February last year.

Russia and Ukraine are two of the world’s key agricultural producers, and major players in the wheat, barley, maize, rapeseed, rapeseed oil, sunflower seed and sunflower oil markets.

Putin has said Russia could return to the grain deal if the West fulfils a separate memorandum agreed with the United Nations at the same time to facilitate Russian food and fertilizer exports.

While Russian exports of food and fertilizer are not subject to Western sanctions imposed after Russia’s invasion of Ukraine, Moscow has said restrictions on payments, logistics and insurance have hindered shipments.

Ahead of the Erdogan talks, Ukrainian officials said Russia launched an overnight air attack on one of Ukraine’s major grain exporting ports.

Romania denied a Ukrainian statement that Russian drones fell and detonated on the NATO member’s territory.

UN proposal

UN Secretary-General António Guterres said on Thursday that he had sent Russian Foreign Minister Sergei Lavrov “a set of concrete proposals” aimed at reviving the deal.

One of Moscow’s main demands is for the Russian Agricultural Bank to be reconnected to the SWIFT international payments system. The EU cut it off in June 2022 as part of sweeping sanctions imposed in response to the invasion.

Russian foreign ministry spokeswoman, Maria Zakharova, said on Saturday that things that were implied by the agreement had not been implemented last time, without specifying. In its report on the Erdogan meeting, Russian state television said promises made to Russia must be implemented.

Russia has blockaded Ukrainian Black Sea ports since it invaded its neighbor, and threatened to treat all vessels as potential military targets after pulling out of the UN-backed deal, which allowed Ukraine to export tens of millions of metric tons of produce.

In response, Ukraine announced a “humanitarian corridor” hugging the western Black Sea coast near Romania and Bulgaria. On Sunday a third vessel, the Liberia-flagged Anna-Theresa, exited the Black Sea via Istanbul through the corridor.

Russia has also been discussing a Putin initiative to supply up to 1 million tons of Russian grain to Turkey at reduced prices for subsequent processing at Turkish plants and shipping to countries most in need.

For Russia, Erdogan is a key broker – and one respected personally by Putin. It is their first in-person meeting since October.

Ahead of Monday’s meeting, US wheat prices closed lower on Friday as markets weighed tight global stocks against the prospect of hefty Russian wheat production and efforts to renew the deal.