For Arthur Portier, by ending the agreement on the export of Ukrainian cereals, Vladimir Putin is waging a “psychological war” with Westerners.
“It’s psychological warfare. Vladimir Putin is trying to put a large part of the importing countries, especially from the African continent, behind him“, analyzed Monday, July 17 on franceinfo, Arthur Portier, consultant at Agritel, a consulting firm specializing in agricultural and agro-industrial markets, after the end announced by Moscow of the agreement on the export of Ukrainian cereals. According to Arthur Doorman, “the current suspension creates a new phase of uncertainty. Who says phase of uncertainty on the markets generally says firmness and rising prices“.
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franceinfo: What is the reality of cereal deliveries to African countries?
Arthur Porter : It is true that of the 33 million tonnes of grain that were exported via the corridor, a large part went to China in particular, then to Spain, then to Turkey, therefore to countries which do not were not considered by the Kremlin as high-need countries. Now, we have to take a step back from this debate since this corridor has led to a depreciation of prices on the international scene. The fact of delivering to China, Spain and other countries, it made it possible to go from €350 to €230 per tonne last July, if I take the prices of wheat in Europe. This fall in prices therefore indirectly benefited international buyers.
Does that mean that a suspension of this agreement, in any case, its expiration without immediate renewal, would have immediate consequences?
The current suspension is creating a new phase of uncertainty. As we know, who says phase of uncertainty in the markets generally says firmness and rising prices. Now, it must be understood, Ukraine has developed alternatives for exporting, in particular rail and road. So yes, the corridor is of major importance, but we are far from the euphoria on the courses that we had last summer.
Ukraine, through the voice of its president Volodymyr Zelynsky, says it is ready today to maintain its exports without Russia. Is it possible ?
It is playable from a practical point of view. Now what should be noted is that the Black Sea area would again become a major conflict area and therefore the insurance cost, the cost of maritime freight would be much higher. So yes, from a practical point of view, it is feasible. Now, be careful that the insurance cost is not exorbitant. This would lead to higher prices for importing countries.
How to interpret Vladimir Putin’s game in this negotiation?
It’s psychological warfare. Vladimir Poutine shows that when he suspends the corridor, there is an immediate reaction on the grains, even if it is less important on the prices than it was in the past. And he says to the importing countries ‘Look, without me, without pursuit of the corridor, the prices go up and as a result, you will be in trouble‘, ‘Look, the Westerners are not respecting the agreement, so we are forced to suspend the corridor‘. So it’s market psychology. We are today in a game, a balance of power which is made between the different countries. Vladimir Putin is obviously trying to put a large part of the importing countries, especially on the African continent, behind him.