 The war in Ukraine has completed five months. Now we know and we've talked about this before that this is not a war between two countries, Russia and Ukraine, but a war between Russia and the larger NATO alliance. And there's also a war that's affecting a lot of us across the world, even in the global south, as it impacts factors such as grain, as it impacts factors such as energy, which have an effect on all aspects of life. We'll be talking about two important developments on two important issues, gas and grain in this episode of Mapping Fortlines. We start with, of course, an agreement that was signed in Istanbul on Friday between Russia and Ukraine and the United Nations. It's important to note that this was not a Russia-Ukraine deal, but a deal between these two countries and the UN. And this provides for the export of grain from the port of Odessa. Now we know that the issue of the export of Ukrainian grain has been a controversy for a long time. A lot of countries have made various allegations against Russia saying that they have prevented this. Russia has countered these allegations very strongly. And it's in this context that this deal has been struck with the mediation of Turkey and the United Nations. We are going to be talking more about this with Praveer Prakasar. Praveer, thanks so much for joining us. So first quickly, could you take us through what is the significance of this agreement at this point of time and, you know, what it implies for the future as far as grain and food prices are concerned? Of course, the food availability of food is a very key issue for large parts of the world. And both Ukraine and Russia are major grain exporters. So this is an agreement not only covering Ukraine's exports, how it will take place from ports. Odessa, of course, is the key one, but there are two other ports also which have been designated here. But also that of Russia, because there are also no direct sanctions by the EU and the United States on grain exports. But what has happened is because of the kind of banking sanctions, insurance sanctions, sanctions on ships, particularly Russian ships, effectively the ability of Russian companies to export grain has also been really endowed. In fact, what has happened is most of the companies which were interested in procuring grain from Russia could not do it because of the fear that they would get sanctions in other areas. The banks would not be able to make the payments. So effectively, there was a sanctions on Russia as well. So given the fact that Russia, in fact, is a bigger exporter than the national market of grains and Ukraine is, given that the fact that two major suppliers were out of the market meant, of course, that the world grain prices also went up. This agreement between Russia and United Nations and Turkey on one hand and again Ukraine, Turkey and United Nations, as you said, this two-part agreement that has been struck, have been in the works for about more than a month now. Now, there has been a, of course, as we know, a lot of campaign on the agreement itself, who was causing the export of grains from both Ukraine and Russia, who was stopping it, this was a question. For Ukraine, it was argued that it was Russian blockade which was stopping it. What this agreement has made clear that Ukraine was very much a party to stopping of the grain exports because it had mined the harbor. And of course, Western media reports keep on talking about Russia and Ukraine mining the harbor, but it was really Ukraine's unwillingness to demine the harbor, create a path through it. That was the major block for any export to take place. And ships, obviously, if the harbor is mined and there are about 40 to 50 ships in Odessa port which are now stuck there, they could not negotiate this because obviously if the mines are not removed, the ships will not fly. The agreement makes clear that Ukraine will open channels, the demine channels in the harbor. They will also provide escorts, boats which will essentially pilot the grain ships. Turkey will guarantee that both the export and ships coming in and ships going out that they will guarantee that they are satisfying the conditions that Russia has laid down. And this agreement now makes clear that there was a key issue of the harbor being mined. It was not a Russian blockade which the West keeps on talking about. The Russia is the party which is stopping the export of grains. It needed both parties of course to agree because they are in a state of war at the moment. But more than the fact that Russia has conditions about the ships being inspected by Turkey to see that they do not carry arms into Odessa and the fact that the ships then would go out and they are exporting essentially grains. Turkey would be the quote unquote honest broker and they would see these obligations from both the export of grains, the export of wheat from Ukraine that takes place, fulfill these conditions and therefore the agreement is also between Turkey as you said, Turkey and Ukraine and the United Nations for this part of it and with Russia again for seeing that they will allow this to happen. A, B, the other agreement which has been struck, which is not making so much news, the fact that the conditions that were laid down by the western countries, their agencies on grain exports, monetary transactions with respect to grain transactions, these will also be allowed and I think the expectation of two major exporters coming in has also eased up the price in the international market. Premier of course significantly this context that the agreement was signed in Turkey which is in this war at least sort of emerged as a major key mediator because we also saw that earlier a round of talks between Russia and Ukraine had taken place with Turkey involved in this as well. But one question that automatically emerges is that is there a possibility of further engagement which might expand possibilities of peace for instance because yesterday's agreement was a very tense one. The Russians and Ukrainians is not directly interacting any way at all. So do we see that is there even the slightest possibility because we do know that the United States and its allies are increasing military support to Ukraine. Russia on the other hand has announced that its offensive is going to continue. There are talks of some kind of counter offensive so to speak by Ukraine for instance. So in the context of all this without looking at the crystal ball, do we see the possibility of is there right now a chance for any kind of negotiations around peace? You know looking at the discussion that they've taken place it doesn't appear that there is any thawing on that count. I think there are two issues or two reasons why it was in the interest of both the countries to agree to this agreement. One is whatever grain exports have to take place if they don't take place now then the warehouses etc are all full or mostly full in Ukraine and therefore new harvest will have no place. So the major part of Ukraine's new harvest then would rot in the fields. So there was an objective pressure on Ukraine to do something about it and essentially as Russia has been arguing quite some time. We'd be willing to have food export takes place provided you divine the harbor and we can guarantee that there is no import of weapons using the grain ships in the guise of grain export you're not importing stuff. So Russia has been saying this I think for more than a month now and they have been saying we're not the ones stopping the export of grain it's really Ukraine and the western media has been as usual giving only one side of the picture. So there's an objective pressure therefore on Ukraine to start the export and if Russian conditions are met they knew that exports could take place from Odessa. On the Russian side of course they also need to export and they also have similar issues that what do they do with the grain that's now already lying with them and the fact that western countries had do a lot of the services you know it's not that they have the ships they do the carrying of the grain but they provide the services and a lot of the companies shipping companies will not touch Russia easily, particularly for the things which are non oil for I think while Russia has alternative they have their own ships which they use, but a lot of other shipping that takes place without the western agencies being involved particularly insurance and shipping finance all of this, the banks which have been sanctioned Russian banks, they were therefore unable to transact this business. So what has happened is directions seem to have been given now that the Russian banks which were sanctioned and the banks operating within the western sphere of influence. They will allow food grain export and both fought in terms of money transaction and insurance, this will not be stopped in that it will actually be allowed to happen. These apparently the European Union is now issued instructions saying how they're calling it clarifications and these are clarifications we are giving, but the reality is that given the blanket sanctions that they had imposed, they are really modifications to what they had said earlier. So this I think are the reasons that this finally though the agreement has taken place, both sides have interest in the agreement because the new harvest is going to come in. The bigger issue of the war, this is not going to be a harbinger shall we say, or a signal that the new disk, you know, era is opening of negotiations between Ukraine and Russia. If we look at what the NATO powers are saying, they're still talking about helping Ukraine to victory. They have the UK intelligence agency saying, oh, you know, Russia is now running out of ammunition, science, and it's really in a bad shape. So every time they see they say it, it's proven wrong, but that doesn't stop them from saying the same thing over and over again. So yes, at the moment there seems to be a bit of a pause in the war, meaning major developments are not taking place. Yes, the fight's still going on. There are talks about advances by Russia in certain sectors. There are talks about Ukraine launching a counter offensive in the south. So all this is on the, you know, on the, shall we say, on the anvil. But what is actually going to transfer, we still don't know. But it doesn't look like that Russia has modified its aims. I think there is some major change in the Ukrainian, on the Ukrainian side. It doesn't appear that we are going to look at a peace offensive instead of a war, a military offensive soon in Ukraine. So I think things are still very much as they are, that we are going to see more military developments. And I for one believe that it's really things on the ground that will finally decide what kind of settlement will take place. And I do not believe the high marks and a few, this kind of artillery long distance artillery pieces, which is what the United States and the NATO countries seem to believe is making a huge difference. I think that's likely to be the case. I think you are going to see the issues on the ground settled, essentially by who has the major ability to mount offensives at the moment. It seems at the moment the instead of initiative still relies really with Russia. And at the moment I do not see Ukraine launching a major offensive as it is being talked about, or being able to reverse the course of the military actions that are taking place in Ukraine. Speaking of course of people whose predictions and calculations were proven wrong, it looks like Germany is definitely in that list because not streamed supplies of natural gas have resumed from Russia to Germany, but they're still not at full capacity. The sanctions that the European countries imposed on Russia coming back to hit them, people talking about a major energy crisis looming in Germany, the possibility of industries having to sort of reduce consumption, maybe power bills increasing so that people will use less electricity. So now we do like I said the power, the gas supply has resumed, but things still in a bit of a crisis as far as Germany and to the large extent Europe is concerned. So how do we see the situation developing on that front as well? You're right that the prophets of doom also who had said that the gas supplies will not resume in Nord Stream one, and this maintenance is only a maintenance argument is only being done in order to cut gas supplies. Russia had been supplying 40% of the rated capacity of Nord Stream one, and they have resumed it seems almost at the same level now. They had taken out the some of the gas stations and essentially the gas station near Finland, which is one end of the Nord Stream one pipeline that they had taken it out for maintenance and this is a long planned outage, which was all known from to all sides. What the German apprehension and what the western media had been saying that Russia may not resume the supplies at all. And they may not even resume even up to the capacity that they were supplying before the maintenance pause took place, which is about 10 days. It's a planned maintenance pause that took place. The interesting part of it is that the Russians have said we cannot go beyond 40% because of the turbine. If you remember, there is a turbine which went to Canada which was then sanctioned and not returned to Germany, which has been now returned to Germany from Canada. But it seems that the paper exchange between Germany and Russia has yet to be completed. Both sides are blaming the other side in the sense that Germany has said Russia is not giving us the papers. Russia has said Germany has not given us the papers before we could actually accept the turbine and they have to give us the papers because of ABCD reasons. There are technical reasons. We need to see what has been done, what the Canadian conditions are. We'll take it back again after putting we put it in. So it seems to be a paper wall which is on. Somehow this turbine still is the Siemens turbine is still in Germany. It has not been transported which was supposed to be via Finland to Russia. That doesn't seem to have taken place. We're not getting into who said what at the moment. But the point is that Russia is also interested that Germany and other European countries should not stock up, should not have a surplus at the moment by which they can fill their storage. They have a roughly about 60% storage for winter. They would like to fill it up to 100%. That means they need a surplus, more than what they're using. That is what they really want at this stage. So before the winter starts, assuming it's September, before the winter starts with the power demand increases, the gas burning, more gas for heating as well as more electricity demand that takes place in winter. They would like to stock up for that and fill their storage, which is something that Europeans do on a cyclical basis. Every summer they stock up winter, they use more than what they're getting. So this cycle is what Russia probably is not very interested in. They would like the European storage to be less than what the full storage. As I said, they have been stocking up for the last I think two to three months. It was about 45%. Now it's come to 60%. I don't think they want Europeans who are continuously threatening Russia with sanctions of different kinds. I don't think they really want them to stock up to the full extent. And that is also one of the reasons I do see there is a strategic interest of Russia not to supply the full Nord Stream 1 capacity, which will allow them to stock up at least for the winter, more than what they have now. The response of the EU of 15% cut, etc. has already drawn a lot of flak from some of the countries, like for instance Portugal who said, hey, we don't even take Russian gas, why should we cut our gas consumption by 15%. They're saying it's for solidarity, but they don't understand why cutting their own consumption helps other countries where they're not, this is not a share that they have in the common EU supplies that they're talking about. So all of this means that there is, you know, European Union's response is no longer as unified as it was in the first three, four months. We have the fall now of Italian government. So all of this seems to show that the European response is slowly not getting to be as unified as it was initially. Fisheries are erupting. The key player always was Germany, because they are the biggest consumer. They are most at risk and at the moment, though they don't want to cut consumption, but they have been on paper, being the most vociferous about the need to cut consumption, cutting consumption in the end of the year, cutting oil imports, cutting coal imports. So they have been at the forefront of the sanctions regime, but at the same time they're the most dependent on European gas. So how we square this dilemma that Germany has, already their industries seem to be suffering because both chemicals as well as metallurgical industries, both of which Germany is a major player as well as engineering industry, all of them depend to a certain extent on gas and electricity, and both counts, Germany is dependent still on Russian gas. The world is not able to understand what exactly Germany wants to do, except the fact that they are fully on board with the sanctions regime. They are backing the United States on this question, going much further than what the United States has. The United States will be very careful not to sanction things they need, but that doesn't seem to be the wisdom that the European Union has. Thank you so much Praveel for talking to us. We will be covering more developments, more aspects of this war in the coming weeks and months as well. Until then keep watching NewsClick.