Three conclusions from Russia’s grain deal U-turn

Russia’s quick U-turn over its earlier decision to suspend participation in the Black Sea grain initiative suggests that pressure from emerging economies got the upper hand over Russia’s efforts to weaken Ukraine’s economy.

What you will learn:

• We expect the grain deal will be renewed on November 19, as doing otherwise would severely damage Russia’s reputation among the collective South. But as Russia tries to restore its exports of wheat and fertilisers, it may continue to use the grain deal as a bargaining chip, renewing volatility in food prices.
• Markets reacted positively to the news. But uncertainty remains, as prices do not yet reflect Russia’s unequivocal participation in the deal.