Factal Forecast

Russia rejoins key Ukraine grain export deal, but fate of long-term extension looms

November 03, 2022 Episode 76
Factal Forecast
Russia rejoins key Ukraine grain export deal, but fate of long-term extension looms
Show Notes Transcript

Editors Jimmy Lovaas and Alex Moore discuss the importance of the Black Sea grain deal and what to watch for next, plus more on the United Nations Climate Change Conference in Egypt, bird flu in the United Kingdom, the US midterm elections and the Association of Southeast Asian Nations summit in Cambodia.

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This episode was produced with work from Factal editors Agnese Boffano, Jaime Calle Moreno, Joe Veyera, Awais Ahmad and Alex Moore.  Music courtesy of Andrew Gospe

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Read the full episode description and transcript on Factal's blog.

Copyright © 2022 Factal. All rights reserved.

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.



Welcome to the Factal Forecast, a look at the week’s biggest stories and what they mean from the editors at Factal. I’m Jimmy Lovaas.

Today is Nov. 3.

In this week’s forecast we’ve got the United Nations Climate Change Conference in Egypt, bird flu in the United Kingdom, the US midterm elections, the Association of Southeast Asian Nations summit in Cambodia and a look at the Black Sea grain deal.

You can also read about these stories and more in our weekly newsletter, which you can find a link to in the show notes.


COP27 in Egypt

Information compiled by Agnese Boffano

JIMMY: Egypt will host the United Nations Climate Change Conference starting Sunday. The conference is being held in the city of Sharm El-Sheikh and comes on the 30th anniversary of the adoption of the UN Framework Convention on Climate Change.

According to the UN’s Intergovernmental Panel on Climate Change, average global temperatures have risen nearly 1.2 degrees Celsius in the last 200 years. What’s more, they could rise well past the 1.5 degrees countries have pledged to stay below.

Accordingly, the summit will focus on three main areas: reducing emissions, steps on preparing and dealing with climate change, as well as steps toward assisting developing countries on the effects of global warming. 

More than 200 countries were invited to attend. Still, some leaders are not expected to come, including Russian President Vladimir Putin and the new British Prime Minister Rishi Sunak.

Now, this conference will mark the fifth time the summit has been held in Africa, with Egypt hoping to draw attention to the severe impacts climate change has had on the continent. 

According to a 2022 report, almost 17 million people are currently facing acute food insecurity in East Africa alone due to ongoing droughts. 

Egypt as a host country, however, has also drawn criticism from climate activists, including Sweden’s Greta Thunberg, who said she will not attend the upcoming talks after accusing the country of what she called “greenwashing.” 

Finally, Amnesty International and Human Rights Watch are among several human rights organizations calling for Egypt to “open civic space and free political prisoners” before the start of the summit.


Birds and poultry ordered to be kept indoors in UK

Information compiled by Jaime Calle Moreno

JIMMY: Starting Monday, all British farmers and bird owners will have to keep their poultry and captive birds indoors. That’s due to an alarming increase in cases of bird flu. 

With around 190 cases of bird flu across the United Kingdom in the past year, including 80 in October, U.K. authorities have introduced a legal requirement for all birds, including chickens, to remain inside and strict biosecurity measures on staff around poultry. 

Large-scale poultry distributors are being particularly hit hard, with the culling of millions of birds this year in order to protect larger flocks. 

Announced Oct. 31, bird owners will have had a week to prepare for the new requirements when they go into effect on Monday.

Now, the decision by U.K. health authorities comes from the fear of having widespread poultry shortages for Christmas if the disease continues spreading, increasing prices along the way. 

The country’s chief veterinary officer said it is “the largest ever outbreak of bird flu” and with cases rising, the order will try to stifle that growth. 

Earlier this year, France eased restrictions while trying an experimental vaccine on poultry, but there are concerns the vaccine doesn’t work in blocking the spread of the disease. 


US midterm elections

Information compiled by Joe Veyera

JIMMY: The balance of power in the U.S. Senate and House of Representatives will be determined on Tuesday. Voters across the country will weigh in on a slew of key federal races, along with various state gubernatorial and legislative contests.

Since the 2020 election, Democrats have held full leadership of the government with control of the White House and both chambers of Congress. 

Democratic party leaders point to legislation like the Inflation Reduction Act and their vows to protect abortion rights as reason to retain their legislative majorities. Republicans on the campaign trail, however, have claimed Democratic policies are behind rising prices and crime rates while pledging to obstruct President Biden's agenda in the final two years of his term.   

Now, most political analysts are predicting Republicans will take control of the House, while the potential Senate majority remains unclear. Polls are showing races within the margin of error in Pennsylvania, Georgia, Nevada, and Arizona, and close contests in Ohio, Wisconsin, and North Carolina. 

Finally, federal officials have also expressed concern over the threat of violence by domestic extremists in connection with claims of election fraud, a fear underlined in recent days by a group of ballot watchers in Arizona seen standing guard near dropboxes, and taking photos or videos as voters dropped off their ballot.


ASEAN summits in Cambodia

Information compiled by Awais Ahmad

JIMMY: Cambodia is set to host world leaders in Phnom Penh on Tuesday. They’ll be meeting for the Association of Southeast Asian Nations summit and related meetings, with the Myanmar crisis expected to be among the central topics of discussion.

The summit comes after concerns over continued violence and the efficacy of the Myanmar peace process prompted an emergency meeting of the 10-country bloc in Indonesia last week. 

Human Rights Watch has called on all attendees to “support tougher sanctions and other measures” to address abuses by the Myanmar junta. A junta, whose leader has not been invited to the summit.    

In addition, Cambodia has also offered to host talks between Russia and Ukraine during the summit, an offer yet to be taken up by either side.  

Now, the summit comes at a crucial point for the bloc, which faces criticism over its approach to resolving the conflict in Myanmar and ending its brutal military crackdown. 

In attendance will also be U.S. President Joe Biden, as the US seeks to reaffirm its commitment to the Southeast Asian region amid a burgeoning political tug of war with China. 


Black Sea grain deal

Information compiled by Alex Moore

JIMMY: Our last item for this forecast is on the Black Sea grain export deal. For more on that I spoke with our Europe desk lead Alex Moore. 

JIMMY: Hello, Alex.

ALEX: Hey, Jimmy, thanks for having me.

JIMMY: Thanks for being here. You know, I’d originally planned to talk to you today about Russia pulling out of the Black Sea grain deal, but seems like things have changed. But actually, before we get into the recent developments, can you maybe give us a brief explanation on what the Black Sea grain deal even is and maybe why it's so important?

ALEX: Yeah, of course. The context of the deal is that Ukraine is one of the largest grain suppliers for the world, specifically for developing countries in places like Africa, South Asia, the Middle East. And Russia, as well, is a big fertilizer and foodstuffs exporter as well through the Black Sea. And those shipments came to a halt after the full invasion in February with Russia, obviously, shutting down and patrolling the Black Sea. So about three months back, the UN brokered a deal involving Turkey, for the Bosphorus Strait where they go through, and Ukraine and Russia to resume their shipments through an established navigation corridor, which has alleviated a lot of the worst fears about, sort of, impending catastrophic food security impacts in some of the developing countries that Ukraine ships to very heavily. So the deal has been in place for about three months now.

JIMMY: And what's the status of the deal now? Is it still in effect?

ALEX: It is, yeah. Russia sort of unilaterally suspended its cooperation a few days back following an attack on Sevastopol, which is the headquarters of their Black Sea naval fleet that destroyed some ships. They allege that Ukraine was behind the attack using what we think were probably, sort of, drone boats. So the allegation was that Ukraine had violated this security corridor and Russia could not guarantee the safety of these grain vessels, so they suspended their cooperation for a few days. But one question that was never really answered was that – grain shipments continued while Russia was suspended unilaterally. So we don't exactly know what it would look like if Russia tried to interfere with them. We don't know if they would detain vessels, if they would fire on them. We never saw that because grain shipments continued. On Wednesday of this week, Ukraine and the UN agreed to not do grain shipments, but obviously Russia announced they were rejoining the deal. So the agreement is in place through November 19, so the UN has been seeking a more, longer-term extension of the deal. Those talks remain elusive. So November 19, is a big date to watch for.

JIMMY: You know, there were a lot of concerns that Russia pulling the plug on this deal would deepen the global food crisis and, you know, possibly lead to food price hikes. Think there's any chance that Russia backtracks on this again?

ALEX: Yeah, I think so. Russia has obviously shown across multiple fronts that they're willing to horizontally escalate the war, which we've seen through their energy war on Europe, supply shocks and the food security stuff. The first few months of the war was another example of this, of course, of them sort of seeking to create this leverage against Ukraine. That said, the deal is obviously mutually beneficial. And so there's a chance that Russia will backtrack, yeah, but I think it's reasonable to hold out hope that they'll reach an extension.

JIMMY: Well, considering all that, you know, what do you think folks should be watching for in the weeks and months ahead?

ALEX: Yeah, I guess, like I said, if the extension is not reached by the deadline, a lot of outstanding questions remain. In the few days where Russia was out of the deal unilaterally they didn't exactly seek to interfere with navigation in the Black Sea. There could be multiple explanations for that, one of them being that their Black Sea fleet has lost its flagship vessel, obviously, which oversees, sort of, area denial protection of other vessels – which, that vessel was sunk months ago by Ukraine. So they might not be willing to risk their Black Sea vessels, perhaps. Maybe if a deal expires they will go ahead and do that and interfere with navigation, but it remains to be seen how that will manifest and whether or not that will result in Ukraine seeking to fire upon these vessels from Odessa, their southern territory they control. So, a lot of moving parts, but the immediate one is, of course, the November 19 date to reach an agreement extension. And I think we can all agree that hopefully that comes to fruition because as we saw in the early days of the war, prolonged interference with Ukrainian grain exports – very wide ranging impacts across wide swaths of the world from, again, South Asia, the Horn of Africa. So, potentially dangerous situation if they don't extend that.

JIMMY: Well, Alex, I think we'll leave it there for today, but as always, I thank you for your time and insight. Hopefully we'll see an extension to the deal.

ALEX: Yeah, you and I both. I'm right there with you. This is the, sort of like, the most significant and large-scale diplomatic achievement since the February invasion. So hopefully we can keep it around.

JIMMY: I'm sure you'll let us know if there's any new developments. Hey, thanks again. 

ALEX: Thank you, Jimmy. 

JIMMY: Take care.


JIMMY: As always, thank you for listening to the Factal Forecast. We publish our forward-looking podcast and newsletter each Thursday to help you get a jump-start on the week ahead. Please subscribe and review wherever you find your podcasts. We’d love it if you’d consider telling a friend about us.  

Today’s episode was produced with work from Factal editors Agnese Boffano, Jaime Calle Moreno, Joe Veyera and Awais Ahmad. Our interview featured editor Alex Moore and our music comes courtesy of Andrew Gospe.

Until next time, if you have any feedback, suggestions or events we’ve missed, drop us a note by emailing hello@factal.com


This transcript may be updated or revised in the future. Accuracy and availability not guaranteed. 

Copyright © 2022 Factal. All rights reserved.

Music: 'Factal Theme' courtesy of Andrew  Gospe.