China trade with Russia up, Ukraine wheat slumps

Death toll from Russian rocket strike on an apartment building in Donetsk rises to 43 people.
Firefighters and members of a rescue team clear the scene after a building was partially destroyed following shelling, in Chasiv Yar, eastern Ukraine, on July 10, 2022. Image: Miguel Medina/AFP/Getty Images
Trade between China and Russia increased in the first half of the year in the face of sanctions from the US and its partners to punish President Vladimir Putin for his invasion of Ukraine.

The death toll from a Russian rocket strike on an apartment building in the Donetsk region rose to 43 people, according to Ukraine’s emergency services, as the Kremlin’s forces pressed forward with their ground assault on the eastern area.

Canada’s agreement to export a natural-gas turbine back to Germany for use in the Nord Stream pipeline for supplies from Russia could last longer than expected, a newspaper report said. The US cut its outlook for Ukraine’s wheat harvest by 2 million tons as farmers find themselves unable to reap all the grain they planted and the war drags on — adding to the grim outlook for global food supplies.

Key developments

  • Higher oil prices are poised to last for months, if not years
  • Italy pulls ahead in European rush to cut Russia-gas dependency
  • US democrats urge new $650 billion IMF aid on Ukraine war hit
  • What if? Markets plan doomsday if Russia turns off the gas
  • Treasury says Russian oil price cap key to avoid new cost shock
  • Russia’s war machine still getting plenty of cash from oil

 

On the ground

Ukrainian rescue workers are still recovering bodies from the debris of the apartment block in Chasiv Yar, according to the State Emergencies Service. So far, 43 people have been confirmed killed. Russian rockets hit the five-story building near Kramatorsk in Ukraine’s eastern Donetsk region over the weekend, in one of the deadliest such attacks of the war. There are five Russian missile carrier vessels in the Black Sea and one submarine. Belarus is likely to continue to grant Russian forces access to its airspace to demonstrate support for Putin without risking the use of its own air force, the Institute for the Study of War reported.

(All times CET)

Italy pulls ahead in rush to cut dependency (7:00 a.m.)

Nearly five months after Russia’s invasion of Ukraine sparked a global energy crisis, Italy is pulling ahead in reducing its dependency on Moscow.

The country has cut its reliance on Russian gas imports to 25%, from about 40% at the start of the year. By contrast, Germany — Europe’s largest economy — still imports roughly 35% of its gas needs from Russia.

China’s first-half trade with Russia increases (4:49 a.m.)

China’s total trade with Russia was worth 519 billion yuan ($77 billion) in the first half of the year, up 27% from the same period in 2021, according to China Customs. In the first five months of the year, exports to Russia have slumped while imports jumped. Most of China’s imports from Russia are oil, gas and coal.

The US has stepped up criticism of China for its diplomatic support of Russia following the start of the war, which has contributed to surging inflation around the globe. Washington has warned Beijing, which declared a “no limits” friendship with Russia shortly before the February invasion, that its companies and officials could face sanctions if the country moves to assist Putin’s war.

Canada deal on turbines covers longer period: Globe (1:02 a.m.)

Canada’s agreement to allow the repair of Russian-owned turbines covers a period of as long as two years from now and would permit the import and re-export of six units, the Globe & Mail newspaper reported, citing two unidentified government officials.

It’s a much more extensive and long-lasting arrangement than was previously disclosed, the newspaper said. The arrangement allows Canada to revoke the sanction-relief permits at any time, it cited one of the officials as saying.

German officials have urged Canada to find a way to return the turbine, fearing Russia would use the issue as an excuse to shut down Nord Stream and cripple Germany’s ability to fill its gas storage tanks ahead of winter. The export decision was made over the objections of Ukraine’s government, which argued sending the pressurization turbine back would undermine the sanctions regime against Russia.

US cuts forecast for Ukraine’s wheat harvest (9:16 p.m.)

The US Department of Agriculture trimmed its outlook for Ukraine’s 2022 wheat harvest by 2 million tons in a monthly global crop report.

Despite rising food prices worldwide, Ukraine is now expected to reap 19.5 million tons of wheat, about 40% less than the prior season. That’s because of cuts to the harvested area, signaling farmers are unable to collect all the grain they planted last autumn. USDA’s estimate is similar to recent forecasts from Agritel, UkrAgroConsult and the Ukrainian Grain Association.

Ukraine gets $1.7bn from the US (3:40 p.m.)

The grant aid is to help finance health care, Ukraine’s Finance Ministry said in a statement on its website. Ukraine received $1.3 billion from the US on June 29.

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