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Wheat harvesting in Kyiv, Ukraine.

REUTERS/Viacheslav Ratynskyi

What We’re Watching: A grain of truth & a win for Biden

No pain no grain

Russia and Ukraine are hardly beating their swords into plowshares, but at least the fruits of the harvest are once again on the move from Ukraine’s Black Sea port of Odesa. Earlier this week saw the departure of the first grain boat from there since the signing of a tenuous new export security deal between Ukraine, Turkey, the UN, and Russia. The return of Ukrainian grain to world markets is welcome news for countries that depend heavily on the country’s exports, as well as for broader food prices around the globe. But it will take months to get back to pre-war export levels, warns the Ukrainian government. The next few weeks will see only about half a dozen departures compared to the normal level of about 200 every August. A big question looms: the first boats to leave Odesa will be ones that were stuck there for months, but it’s unclear whether a large number of grain traders will be willing to take the immense financial and insurance risk of sending fresh boats to Odesa. GZERO reader Jonathan Grange, a grain trader at Sunstone Brokers in Switzerland, tells us that a fully laden grain boat is worth about $70 million — “who,” he asks, “wants to assume the risk of a Russian misfire on this value?”

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European Commission holds a news conference in Brussels.

REUTERS/Yves Herman

What We're Watching: EU's energy conundrum, Plan B for Ukraine grain exports, war games in Taiwan, robot revenge

EU’s deepening gas woes

Europe’s gas crisis went from bad to worse on Monday after Russia announced that it would slash deliveries to Germany via the Nord Stream 1 pipeline to 20% capacity beginning this week. The Kremlin’s dramatic move is further testing the European Union’s cohesiveness just days after Brussels called on members to voluntarily cut natural gas consumption by 15% until at least April 2023. The European Commission, the EU’s executive arm, wants its 27 member states to cut back in order to boost stockpiles ahead of winter as Russia continues to use its natural gas exports as a political weapon. But the sense of European unity that defined the early stage of the war – when the bloc rallied together to enforce crushing sanctions on Moscow – is now waning. Countries like Spain and Portugal that rely less on Russian natural gas than the Germans and Italians, say the plan doesn’t account for EU countries’ disparate needs (a diplomatic way of asking why the heck they should suffer because Berlin has failed to diversify its energy portfolio). Though Brussels prefers for the plan to remain voluntary, it has threatened to make reductions in gas consumption mandatory across the bloc. The plan could go to a vote as soon as Tuesday and requires 15 of 27 states to back it. For now, the bickering continues.

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