Wednesday, May 25, 2022

Ukraine warns of multi-year food crisis and several other articles about Ukraine and Russia

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Ukraine warns of multi-year food crisis; Zelenskyy says situation in Donbas ‘very difficult’

This is CNBC’s live blog tracking developments on the war in Ukraine. See below for the latest updates. 

Ukraine Foreign Minister Dmytro Kuleba spoke to CNBC’s Hadley Gamble at the World Economic Forum in Davos, Switzerland. Kuleba discussed the Ukraine war, the reconstruction of his country and further sanctions against Moscow.

Meanwhile, Ukraine’s President Volodymyr Zelenskyy has said the situation in the Donbas in eastern Ukraine is “very difficult” with Russian forces concentrating their fire and manpower on assaulting the region and seizing key cities there.

Zelenskyy said in his nightly address to the nation that “practically the full might of the Russian army, whatever they have left, is being thrown at the offensive there. Liman, Popasna, Sievierodonetsk, Slaviansk – the occupiers want to destroy everything there.”

Zelenskyy offers condolences to families of victims in Texas school shooting

Volodymyr Zelenskiy, Ukraine's president, delivers a special address via video link on the opening day of the World Economic Forum (WEF) in Davos, Switzerland, on Monday, May 23, 2022.
Volodymyr Zelenskiy, Ukraine’s president, delivers a special address via video link on the opening day of the World Economic Forum (WEF) in Davos, Switzerland, on Monday, May 23, 2022.
Hollie Adams | Bloomberg | Getty Images

Ukrainian President Volodymyr Zelenskyy offered his condolences to the families of the victims in Tuesday’s mass shooting at an American school that left at least 19 children and two teachers dead.

“I would like to express my condolences to all of the relatives and family members of the children who were killed in an awful shooting in Texas in a school,” Zelenskyy said by video link to the World Economic Forum in Davos, Switzerland.

“As of this time, as far as I know, 21 people were killed, including 19 children,” he said. “Absolutely innocent children are being murdered in an absolutely peaceful time.”

“This is terrible to have victims of shooters in peaceful times,” he added.

— Amanda Macias

Russia says it will pay foreign debt in rubles after U.S. ban

Russian President Vladimir Putin attends the Collective Security Treaty Organization (CSTO) summit at the Kremlin in Moscow, Russia May 16, 2022.
Russian President Vladimir Putin attends the Collective Security Treaty Organization (CSTO) summit at the Kremlin in Moscow, Russia May 16, 2022.
Sergei Guneev | Sputnik | via Reuters

Russia says it will pay dollar-denominated foreign debt in rubles, a move that is likely to be seen by foreign investors as a default.

The U.S. Treasury Department led by Janet Yellen allowed a license to expire Wednesday that permitted Russia to keep paying its debtholders through American banks. The license applied to American investors and international investors who have dollar-denominated debt or bonds.

The Russian Finance Ministry said it will pay in rubles and offer “the opportunity for subsequent conversion into the original currency.” The ministry didn’t give a timeframe for that to happen.

Russia has not defaulted on its international debts since the 1917 Bolshevik Revolution, when the Russian Empire collapsed and the Soviet Union was created. Russia defaulted on its domestic debts in the late 1990s during the Asian financial crisis but was able to recover from that default with the help of international aid.

— Associated Press

UN says at least 3,974 killed in Ukraine since start of war

A woman mourns while visiting the grave of Stanislav Hvostov, 22, a Ukrainian serviceman killed during the Russian invasion of Ukraine, in the military section of the Kharkiv cemetery number 18 in Bezlioudivka, eastern Ukraine on May 21, 2022.
A woman mourns while visiting the grave of Stanislav Hvostov, 22, a Ukrainian serviceman killed during the Russian invasion of Ukraine, in the military section of the Kharkiv cemetery number 18 in Bezlioudivka, eastern Ukraine on May 21, 2022.
Dimitar Dilkoff | AFP | Getty Images

The United Nations has confirmed 3,974 civilian deaths and 4,654 injuries in Ukraine since Russia invaded its ex-Soviet neighbor on Feb. 24.

The Office of the U.N. High Commissioner for Human Rights said the death toll in Ukraine is likely higher, because the armed conflict can delay fatality reports.

The international organization said most of the civilian casualties recorded were caused by the use of explosive weapons with a wide impact area, including shelling from heavy artillery and multiple launch rocket systems, as well as missiles and airstrikes.

— Amanda Macias

Multi-year food crisis a big threat, Ukraine’s foreign minister warns

A photograph shows a wheat field at a farm in southern Ukraines Odessa region, on May 22, 2022 on the 88th day of the Russian invasion of Ukraine.
A photograph shows a wheat field at a farm in southern Ukraines Odessa region, on May 22, 2022 on the 88th day of the Russian invasion of Ukraine.
Genya Savilov | AFP | Getty Images

Global food prices are already soaring because of the war in Ukraine, with ships blocked from exporting the country’s staple produce, like wheat.

Dmytro Kuleba, Ukraine’s foreign minister, has now warned that the blockade could lead to a multi-year food crisis.

“This is only the beginning and if we allow Putin to continue this military madness, the crisis will go deeper and deeper,” he told CNBC’s Hadley Gamble at the World Economic Forum.

“If Russia does not lift its blockade ... Ukrainian grain will be getting rotten. If this problem is not resolved, Ukrainian farmers will not plant another crop and the whole agricultural cycle in Ukraine will be interrupted and that will mean a multi-year food crisis.”

CNN anchor Fareed Zakaria (L), The Economist editor-in-chief Susan "Zanny" Minton Beddoes (2nd L), historian Timothy Snyder (2nd R) and Ukrainian Foreign Minister Dmytro Kuleba (R) attend the event on the sidelines of the World Economic Forum (WEF) annual meeting in Davos on May 25, 2022.
CNN anchor Fareed Zakaria (L), The Economist editor-in-chief Susan “Zanny” Minton Beddoes (2nd L), historian Timothy Snyder (2nd R) and Ukrainian Foreign Minister Dmytro Kuleba (R) attend the event on the sidelines of the World Economic Forum (WEF) annual meeting in Davos on May 25, 2022.
Fabrice Coffrini | AFP | Getty Images

Kuleba said countries were already feeling the pressure of rising food prices. The European Commission and U.S. have accused Russia of weaponizing food supplies in the war but Russia denies that, instead blaming Western sanctions.

A Russian minister said Wednesday that Moscow would consider humanitarian corridors for ships exporting produce, in return for a relaxation of international sanctions.

— Holly Ellyatt

Ukraine won’t cede any territory to Russia, foreign minister says

Ukraine’s foreign affairs minister has added to criticism of Henry Kissinger’s suggestion that Ukraine should consider ceding territory to Russia in order to bring about peace.

“I respect Henry Kissinger but I appreciate that he’s not holding any official position in the U.S. administration, he has his own opinion, but we strongly disagree with it,” Dmytro Kuleba, Ukraine’s foreign minister, told CNBC Wednesday.

“This is not something we’re going to do,” he added.

Kuleba said Ukraine had followed a policy of constructive dialog with Russia even after it annexed Crimea in 2014, but this had not brought about a peaceful resolution to the conflict in the Donbas region where there has been fighting between pro-Russian separatists and Ukrainian forces over the last eight years.

“It never worked and in the end it brought us all to the biggest war in Europe since World War II. If it failed once, it will fail twice,” he said.

— Holly Ellyatt

Ukraine’s ‘polite’ reply to Henry Kissinger: We will not give an inch of land to Putin

Henry Kissinger speaks suring an interview in Washington DC. Kissinger is a 1973 Nobel Peace Prize laureate. He served as National Security Advisor and later concurrently as Secretary of State in the Richard Nixon administration.
Henry Kissinger speaks during a 2007 interview in Washington.
Brooks Kraft | Corbis Historical | Getty Images

A Ukrainian MP has given what he called a “polite” reply to Henry Kissinger’s suggestion that Ukraine should be prepared to cede some territory to Moscow in order to reach a peace deal.

“I think Mr Kissinger still lives in the 20th century and we are in the 21st century and we are not going to give up any inch of our territory,” Oleksiy Goncharenko, a Ukrainian member of parliament, told CNBC Wednesday. “That would be the worse signal to Putin,” he added.

“We should stop Putin now and not let him go further,” Goncharenko said, adding that he believed the best way to establish peace was to bring Ukraine inside the European Union as quickly as possible.

Former U.S. Secretary of State and National Security Advisor Henry Kissinger caused a stir earlier this week when he suggested that Ukraine should be prepared to cede some territory to Russia in order to reach a peace deal with Moscow.

Speaking on a panel at the World Economic Forum on Monday, Kissinger said “ideally, the dividing line should return to the status quo ante,” meaning a return to the existing state of affairs before the war, suggesting that he thought that Russia should be allowed to retain Crimea, which it annexed in 2014.

Kissinger, who served under Presidents Richard M. Nixon and Gerald Ford, said that “pursuing the war beyond that point would not be about the freedom of Ukraine … but a new war against Russia itself.”

Ukraine’s President Volodymyr Zelenskyy has ruled out ceding any land to Russia as part of a deal, particularly in reference to the Donbas region in eastern Ukraine, where Russian forces are currently focusing on seizing. It’s unclear whether Kyiv might accept that Crimea remains in Russian hands, however.

— Holly Ellyatt and Sam Meredith

Russia’s invasion sending ‘shock waves’ around the world, EU commissioner says

Smallholders use pitch forks to collect hay during a summer wheat harvest in Chernihiv, Ukraine, on Thursday, Aug. 10, 2017. Ukraine's wheat harvest reached 19.1m tons as of Aug. 1, local Agriculture Ministry said in an emailed statement. Photographer: Vincent Mundy/Bloomberg via Getty Images
Global prices for some grains have spiked since the Russia-Ukraine war started, with both countries contributing a significant percentage of the world’s supply for some of those commodities such as wheat.
Vincent Mundy | Bloomberg | Getty Images

“We clearly see the consequences of Russia’s invasion in Ukraine, it’s sending shock waves around the world, and the world economic growth forecast has been revised downwards considerably and the same is true in the EU,” Valdis Dombrovskis, European vice president and commissioner for trade for the European Commission, told CNBC on Wednesday.

Speaking to CNBC at the World Economic Forum in Davos, which has been focused on the plight of Ukraine as Russia’s invasion continues, as well as the global fallout from the war, Dombrovskis said the EU needed to act urgently to sever its energy ties with Russia.

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EU trade commissioner: See substantial slowdown in EU amid war in Ukraine

The invasion has led the EU to scramble to reduce its reliance on Russian gas supplies although an EU-wide embargo on oil and gas from Russia is still not agreed upon.

“We urgently need to move away from our dependence on Russian fossil fuels,” Dombrovskis said.

— Holly Ellyatt

Russia claims it’s ready to set up corridors for ships leaving Ukraine with food

Cargo ship with Ukrainian corn departs to Germany from Chornomorsk, Odesa Region, southern Ukraine.
Cargo ship with Ukrainian corn departs to Germany from Chornomorsk, Odesa Region, southern Ukraine.
Yulii Zozulia | Future Publishing | Getty Images

A Russian official has reportedly said Moscow is ready to provide a humanitarian corridor for ships carrying food to leave Ukraine, in return for the lifting of some sanctions.

“We are always ready for dialogue with everyone who strives for peace, for a peaceful resolution of all problems,” Russian Deputy Foreign Minister Andrei Rudenko said Wednesday, according to Russian state news agency interfax.

“We have repeatedly spoken out on this subject that the solution to the food problem requires a comprehensive approach,” he said, “including the removal of sanctions restrictions that were imposed on Russian exports and financial transactions.”

Russia is ready to provide the necessary humanitarian passage, Rudenko claimed.

On Tuesday, the president of the European Commission, Ursula von der Leyen, accused Russia of “weaponizing” food supplies in Ukraine by blocking exports of basic produce from the country, such as wheat and cooking oil. Global food prices have risen as a result of the reduced exports. Russia denies it is using food to pressure Ukraine’s allies into loosening sanctions.

Andrius Tursa, Central and Eastern Europe advisor at Teneo Intelligence, said in a note Wednesday that “there are no easy ways to unblock food exports via Ukraine’s Black Sea ports,” and that alternative export routes via land and rivers require time and investment to eliminate infrastructural and bureaucratic bottlenecks.

“The war will significantly lower Ukraine’s food production and exports for the foreseeable future,” Tursa said.

 Holly Ellyatt 

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