Moscow’s withdrawal from the Ukrainian Grain Export Initiative via the Black Sea has immediate repercussions on Turkey. This is evident in the damage to Turkey’s food supply chains, the surge in food prices, and the deepening of the Turkish economic crisis. Moreover, there is a potential impact on Turkey’s role as a mediator in the Russian-Ukrainian crisis. As a result, Ankara has stepped up its efforts to mediate between the parties involved in the crisis, aiming to achieve a breakthrough that would secure Russia’s return to the agreement and prompt the West to meet Moscow’s demands.

Turkish President Recep Tayyip Erdoğan is applying pressure for Russia’s reentry into the grain agreement. On July 21, he stated that his upcoming discussions with Russian counterpart Vladimir Putin might result in reviving the grain initiative and encouraged Western nations to take Russia’s demands into account. This withdrawal places potential and unprecedented strains on the Turkish economy, evident in the escalating inflation rates, surging food prices, and a rise in the food import expenses.

On the other hand, recent tensions between Moscow and Ankara arose due to the latter’s endorsement of Sweden’s NATO membership and expressing support for Kyiv’s NATO accession. Moscow’s withdrawal from the grain agreement may negatively impact Turkey’s gained position among the parties involved in the crisis. Turkey has been acting as a mediator, skilled in achieving breakthroughs in the complex issues between the West and Moscow. On July 17, Moscow withdrew from the grain agreement after Ukraine failed to meet its demands for improving food and fertilizer exports. Additionally, sanctions were imposed on insurance companies and shipping services dealing with Russia.

Negative Consequences

The Russian withdrawal from the grain agreement has tangible implications for Turkey, considering Russia and Ukraine’s potential roles in meeting Turkey’s grain and some food commodity needs. The impact of freezing this agreement on Turkey can be illustrated through the following points:

1. Increase in Food Prices: The Russian withdrawal from the grain agreement has immediate and direct repercussions on the Turkish market, leading to a renewed surge in food prices after a relative decline in the previous months, thus preventing Turkey from facing a food crisis. According to estimates by the Joint Coordination Center between the parties to the grain agreement, based in Istanbul, the grain agreement signed in July 2022 under the auspices of Ankara and the United Nations significantly contributed to preventing price hikes in Turkey and benefited the country, as it imported 3.1 million tons of Ukrainian grain. However, the current developments, Russia’s insistence on not renewing the agreement, and the warning against implementing the agreement unilaterally may accelerate the pace of strategic food commodity price increases in the country, adding further pressure on the Turkish economy, which is already experiencing significant downturns.

2. Disruption to Food Supply Chains: The Russian withdrawal has led to escalating concerns among Turkish and international shipping companies responsible for transporting Ukrainian grain. This translates to higher costs for securing ships due to increased risks faced by the presence of Russian warships in the Black Sea, not to mention Moscow’s recent targeting of the Ukrainian port of Odessa on the Black Sea.

In this context, the halt of Ukrainian grain shipping operations, or at least the rise in its financial and security costs, may hinder its arrival in the Turkish markets. This could result in disruptions to supply chains, severe shortages in food imports in the Turkish markets, exacerbating the food gap that Turkey is experiencing. This gap has intensified following the decline in agricultural production in Turkish provinces affected by the devastating earthquake on February 6th.

3. Decline in Turkey’s Profits from the World Food Program: Over the past year, Turkey achieved significant profits from the United Nations World Food Program. The grain initiative in the Black Sea, since August last year, allowed the export of three million tons of grain via sea to benefit the World Food Program, which provides assistance to food-deprived countries like Ethiopia, Yemen, and Afghanistan. Turkey benefited from the milling process of these grains on behalf of the World Food Program, which distributed them as flour in the program’s member countries in exchange for financial entitlements.

4. Decline in Macroeconomic Indicators: The cancellation of the grain initiative poses a threat to deepening the Turkish economic crisis, given the rise in food prices and the continued depreciation of the Turkish lira, which lost over 77 percent of its value against the US dollar from 2018 to 2023. Freezing the grain agreement also contributes to the surge in inflation rates, which reached record levels, reaching nearly 64.24 percent by the end of last May. Additionally, the standard of living for Turkish citizens has deteriorated. According to data from the Turkish Statistical Institute, consumer prices rose by 6.65 percent on a monthly basis.

5. Loss of Mediation Role in the Ukrainian Crisis: The Russian decision to withdraw from the grain initiative may lead Turkey to diminish its role as a mediator between the parties in the Ukrainian crisis. This role has allowed Turkey to secure a range of interests with both the West and Moscow simultaneously. Turkey’s success in brokering the grain agreement helped alleviate Western pressures on Ankara in several sensitive issues, most notably turning a blind eye to Turkey’s eastern pivot. Additionally, Turkey’s mediation in the grain initiative provided an opportunity for Ankara to deepen its relations with Moscow and obtain a portion of its energy and food imports from Russia in the local currency.

Potential Opportunities

Since Russia’s announcement of withdrawal from the grain initiative, Turkey has maintained a balanced position between the parties in the crisis, recognizing that the dismantling of the grain agreement and its inability to extend or renew it could diminish its strategic role between the parties in the Ukrainian crisis. In this context, Ankara’s approach can be understood as opening communication lines with various parties involved in the crisis. This was evident in Erdogan’s emphasis on attempting to persuade Putin to renew the grain agreement during a possible visit by the Russian counterpart to Turkey in August. Additionally, Turkey has engaged in intensive communication with the Russian President and government officials to ease the crisis.

Furthermore, after Russia’s withdrawal from the grain agreement, Ankara has renewed the importance of its strategic relations with Russia and reaffirmed its rejection of Western sanctions imposed on it. These steps demonstrate Turkey’s efforts to navigate the situation and maintain its strategic position amid the evolving crisis.

In parallel, Ankara has intensified its efforts to pressure Western powers to meet Russia’s demands to ensure the flow of grain to global markets. It is worth noting that on July 21, after returning from his Gulf visit, the Turkish President called on Western countries to meet Russia’s demands, including allowing the reintegration of the Russian Agricultural Bank into the global financial network, as this could serve as an incentive to encourage Moscow to return to the grain initiative. He further added, “We understand that President Putin also has certain expectations from Western countries, and it is of utmost importance for these countries to take action in this regard.”

In contrast, Turkey called for the facilitation of Russian fertilizer exports, as the success of the grain agreement in the coming phase remains significantly linked to Moscow’s condition of smooth Russian fertilizer exports. Turkey also emphasized the importance of providing sufficient guarantees by the parties involved in the grain export agreement to ensure compliance with its provisions. In this regard, Turkey urged an end to the Russian targeting of Ukrainian ports, particularly the port of Odessa.

Pressing Ramifications

In conclusion, the Russian withdrawal from the grain agreement may impose various repercussions on Turkey during the current phase, especially with the ongoing severity of the economic crisis in the country. Additionally, it could have potential implications for Turkey’s role as a mediator in the Ukrainian crisis, particularly amid emerging differences with Moscow and continued complex disputes with the West.