American officials secretly encourage Russian companies to ease supply shortages.
Bloomberg reported that the US is encouraging agricultural businesses to import more fertilizer in Russia. Bloomberg noted that companies are afraid of American sanctions and have stopped purchasing fertilizer even though loopholes were created into penalties.
They have “quietly”Informed companies may increase Russian fertilizer imports in the face of growing food shortages, according to a report on Monday.
Since the attack on Ukraine started in late February and has been retaliated by the United States, Europe and other allies, the sanctions have led to a torrent of economic sanctions against Moscow. But now they face a quandary as shippers and other industry are refusing to trade with Russia’s fertilizer. The sanctions make exemptions for the good – of which Moscow is a key global exporter – but companies have nonetheless been reluctant to buy, helping to drive a 24% drop in Russian fertilizer sales this year.
Conflict in Ukraine is fueling food shortages across the globe. Russia and Ukraine account for large amounts of global grain exports. This has helped to push prices up to new records.
Washington blamed Moscow for the current crisis. It claimed that Moscow is preventing Ukrainian grain from reaching international markets. However, the Kremlin instead pointed out Western sanctions as the main culprit for spikes in prices and scarcity of staple goods. Russian officials criticize Kiev also for refusing to clear out its naval mines in some of its ports. This is cited as another cause behind the shortages. However, Ukraine insists that the weapons are necessary to protect against Russian aggressions.
Russia is asking the US to provide additional assurances for firms that want to purchase fertilizer from it. The hope is that this will help companies who are wary of sanctions. There are talks underway on this matter. “slowly,”Bloomberg reports that American officials approached several firms to discuss the purchase.
The United States is trying to increase exports by rail of Ukrainian products in the next months. However, logistical challenges are hindering the process amid the ongoing conflict in Ukraine.
“We’re looking at a substantial shortfall,” James O’Brien, who leads the US State Department’s Office of Sanctions Coordination, told a virtual briefing earlier this month. He said that “We’re working together with our partners to get about half of what Ukraine exports out each month,”But it will be worth the effort.
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