NEW YORK, NEW YORK, US — US bank J.P. Morgan has stopped processing payments for the Russian Agricultural Bank, Reuters reported on Aug. 4.
Russia pulled out of the Black Sea Grain Initiative on July 17 and since then has bombed numerous grain storage and handling assets in Ukraine near the Black Sea and on the Danube River.
Russia has said it would consider returning to the deal, which for nearly a year allowed Ukraine to ship its grain from its Black Sea ports, if its demands were met. They include the reconnection of the Russian Agricultural Bank to the SWIFT international payments system, which has been cut off by the European Union since Russia invaded Ukraine on Feb. 24, 2022. However, over the past 18 months, J.P. Morgan, with the US government’s approval, has processed some grain export payments. But a Russian government official told Reuters that J.P. Morgan halted the processing of payments last week.
Since Russia’s exit from the grain deal, shipments of Ukraine grain have been drastically reduced. In the 2022-23 marketing year, Ukraine, which in recent years has been one of the world’s largest wheat and corn producers and exporters, exported more than 33 million tonnes of agricultural products. In the current marketing year, a steep decline is projected for wheat and corn exports, with wheat shipments forecast to fall from 16.8 million tonnes to 10.5 million, and corn exports expected to decline from 28 million tonnes to 19.5 million, according to the US Department of Agriculture’s Foreign Agricultural Service.
Those projections were made before Russia pulled out of the grain deal.
The United Nations declined to comment. The US State Department and J.P. Morgan did not immediately respond to a request for comment.