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First Move with Julia Chatterley

France: Russia Preparing Offensive "To Conquer Donbas"; Global Institutions Call for Action on Food Security; Russia Threatens to Bolster Defenses in Neighbors join NATO; Malachiyev: Ukraine Citizens Depend on us Staying Open; Shanghai Reports 27,719 new COVID cases in a Day; Musk: "It's a High Price and your Shareholders will Love it". Aired 09-10a ET

Aired April 14, 2022 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:00]

JULIA CHATTERLEY, CNN HOST, FIRST MOVE: --in the battle for Ukraine. Take a look at these satellite images they show the flagship of the Russian Black

Sea fleet known as - its crew evacuated. Now Russian state media says a fire broke out it remains afloat and is moving to port.

The Ukrainians, however, are taking credit. They say it was targeted by their anti-ship missiles. And 800 kilometers north in the Kharkiv region

these images released by the Ukrainian government reportedly show a bridge that was blown up as Russian military vehicles for crossing.

The Ukrainian say armored cars and trucks were destroyed in the attack. CNN has not been able to verify the claims. Now with more on the Russian

warship CNN Correspondent Matt Rivers sent this report from Lviv.

MATT RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, no matter which way you slice this Julia the fact that one of Russia's premier warships is

now out of action is a very significant development. No matter whom you believe when it comes to the cause of the fire on board.

What we're hearing from Russian state media is that a fire broke out onboard this ship. They don't say what the cause of the fire was, but that

caused ammunition onboard the ship to explode.

It put the ship out of action and it forced the Russian Navy to evacuate all of the sailors that were on board that ship they've since been

evacuated according to the Russian Defense Ministry two other ships in the area, this ship now being set to be towed to port presumably to make some

repairs.

Now on the Ukrainian side, they're saying that it was Ukrainian armed forces that caused this by firing shore based cruise missiles that hit this

ship. It caused the fire it caused all that ammunition to explode and essentially knocked the ship out of action. They said it began to sink at

some point after the missiles hit that ship.

The Ukrainian saying that they use a missile system called "The Neptune Missile" that they have developed themselves here in Ukraine. It was a

missile first brought online within the last year or so according to Ukrainian officials.

Now CNN cannot independently verify the status of this ship. Normally, we would rely on satellite imagery to be able to get a look at this ship,

confirm whether it was hit or not. But right now there is cloud cover in that area which is made getting any satellite imagery to analyze difficult

at this point.

But no matter what the cause of this is, I think it's a very significant developed both technically it impacts the Russian Navy's ability to

operate. This is one of their premier warships, but this is also a symbolic blow, I think to the Russian Navy. This is the flagship of the Russian

Navy's Black Sea Fleet; the fact that it is no longer operational Julia is a big deal.

CHATTERLEY: And more from the Port City of Mariupol Russian state TV has ad video it claims to as Ukrainian prisoners of war, some of them appear to be

injured and on stretches. On Wednesday, Ukraine said one unit of its troops in the city had joined forces with another battalion again CNN not in

Mariupol and is not embedded with any Russian troops there.

So we've been unable to verify the Russian version so far.

And the large scale offensive could be launched in Donbas over the next few days. That's according to intelligence from the French military. The

Kremlin is warning that if Ukrainian attacks on what they consider Russian territory continue, then they will strike so called decision making

centers, including Kyiv. And many people in the region remain to find and say they're not leaving as Ben Wedeman reports.

(BEGIN VIDEO CLIP)

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): All is not quiet on Ukraine's Eastern front. Not far from the town of - Russian

mortars warn of what's to come. Ukrainian officials say the offensive in the Donbas region the Eastern part of Ukraine has begun.

Perhaps it has or perhaps this is the softening up before the onslaught among Ukrainian troops bravado. This officer gives a more sober assessment.

The Russians are building up for an attack. They're coming and coming and coming Lieutenant - tells me we're not in an easy situation.

Russian shelling Tuesday killed three people including a 16 year old girl according to the town mayor, who has been urging residents to leave not

everyone, hates his call. The stubborn few wait for supplies.

This is our town insists - we're staying here. We know our soldiers are protecting us. Miller looks to a higher power. We'll pray to God she says

maybe he will save us all. 83-year-old - outside her home she too is staying put in - my son's wife is scared and will probably leave today she

says but I'm not afraid.

[09:05:00]

WEDEMAN (voice over): And then off she goes on her bicycle gathering storm be damned Ben Wedeman, CNN, Eastern Ukraine.

(END VIDEO CLIP)

CHATTERLEY: Vladimir Putin appearing defiant on Russian energy exports, the President says there's no alternative to Russian gas. And he's threatening

to take his business to Asia, if Europe doesn't cooperate.

Clare Sebastian, following the story for us, Clare, the lack of sanctions on oil and gas from Europe in particular, is evidence that his point on the

inability to just move away from Russian gases is quite right. And that's what's heartbreaking about this, I think, what did he have to say about the

Asia pivot?

CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, so Putin is meeting with various different sectors of his economy Julia, to sort of prepare them for the

fact that as he says, sanctions are going to be in place for a long time. So he says the Russian economy needs to adapt.

And he set out various tasks for the energy sector in Russia to sort of secure it for the long term. And one of those is finding new or developing

sort of eastern and southern markets for its energy, take a listen to what he had to say.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT: We need to diversify our exports; we need to assume that in the foreseeable future, deliveries of energy in the

western direction will be reduced. So we need to strengthen the tendency of the last few years step by step re-orientate our exports to the fast

growing markets of the south and east.

(END VIDEO CLIP)

SEBASTIAN: So the upshot of that is he's saying, look, the West needs us more than we need the West. We have alternatives. And Julia, we are seeing

this happening already analysts are saying that India, for example, is purchasing a lot more oil since the war started from Russia than it was

before.

So they are finding alternatives, especially since they now have to sell Russian oil at a discount, which was not surprisingly not something that he

mentioned.

CHATTERLEY: No, I'm sure he didn't. And in the interim, he's saying to the Europeans and those so called unfriendly nations, you need to pay for your

oil and your gas in Rubles, except we spoke to the French Finance Minister in the past week, he said, nothing's changed. We're still paying as per

contract also not mentioned, Clare.

SEBASTIAN: Yes, this is becoming an increasingly complex situation Julia because we're hearing from the likes of the French the Netherlands saying

today that they are not going to pay for gas in Rubles the European Commission President saying to CNN also that this would be a violation of

sanctions.

We also heard from Vladimir Putin today that he's seeing delays in payments, through Western banks that payment failures are happening. All of

this is looking a little bit worrying the delays in payments, the refusal by the EU or certain EU countries to pay in Rubles, Russia's rhetoric that

it has, you know, a lot of access to alternative markets.

And it's going to develop that I think that spells that we're in a very complex moment in terms of Russian gas supplies to Europe, even as we wait

for any more talk among European leaders on whether they will move towards an embargo on oil and potentially discuss something on gas even though it's

very clear that as Putin said, they don't have an alternative.

CHATTERLEY: Yes, for now Clare Sebastian, thank you for that. Rising energy prices of course financing risks and food insecurity that triple threat

facing some of the world's poorest nations and more according to a joint statement from the World Bank, the IMF, the World Food Programme and the

World Trade Organization who are making a collective call to action

David McKenzie joins us to discuss.

David Oxfam caught my attention this week ahead of the IMF spring meetings next week, saying 860 million people could be living in extreme poverty. On

less than $1.90 a day, by the end of this year, the number of undernourished people could reach 827 million in 2022 the number of people

that are facing severe difficulties as a result of what we're seeing and beyond. It's huge.

DAVID MCKENZIE, CNN CORRESPONDENT: Well, it is huge, and there's always this issue of hunger, of course, on this planet because of the inequalities

that countries have to deal with every single day. But I know on your show, you've been talking a lot about inflation and food inflation, and on top of

that, the war in Ukraine could bring higher prices and more pain.

(BEGIN VIDEOTAPE)

MCKENZIE (voice over): The early starts and the intense work at the Phillips - bakery in Lagos used to be worth it used to be profitable.

ABIGAIL OLUFUNMILAYO PHILLIPS, BAKERY MANAGER: Early this year, precisely around the time of the bombing of Ukraine, which has affected the supply of

wheat, which has affected our primary item of production, which is the white wheat flour. Our flour has been very expensive which prices are

changing constantly.

MCKENZIE (voice over): Now they can only afford to produce half of what they did, and each tin gets less dough. This war is horrifying for Ukraine.

People it could be devastating for global food security.

[09:10:00]

MCKENZIE (voice over): Russia and Ukraine are agricultural export powerhouses on the field of battle, farmers will struggle to plant crops.

With export ports blockaded by Russian warships it has pushed the prices even higher.

So the 10 hours - selling bread won't be enough to feed her two children. She says customers don't have the cash anymore. They often refuse to pay

the going rate. And even on the fertile slopes of Mount Kenya, they are hurting.

Caroline Kimarua had to slash the workforce. The cost of fertilizer for her tea and coffee plantations has doubled in recent months.

CAROLINE KIMARUA, FARMER IN EMBU, KENYA: We have no money to buy that fertilizer at that high cost.

MCKENZIE (voice over): And Russia is one of the world's biggest fertilizer producers, sanctions and trade disruptions are likely to push prices even

higher.

MCKENZIE (on camera): Could this be any worse timed.

WANDILE SIHLOBO, CHIEF ECONOMIST, AGRICULTURE BUSINESS CHAMBER OF SOUTH AFRICA: And the war is starting at one of the worst times because we were

already thinking we are in a recovery mode. On top of that, there were already inflation pressures that were across the world.

Africans are spending a lot on fuel and spending a lot on food, then in this current moment, this is a tough time for the continent.

MCKENZIE (on camera): The impact of this conflict is coming on top of already soaring global grain prices. And if you look at this map over here,

of course, countries across the world could feel the pain. But economists point to specific African countries like Senegal, which imports more than

50 percent of its wheat from Ukraine and Russia and Somalia, which imports more than 90 percent.

MCKENZIE (voice over): And in Somalia, already suffering from generational drought, hundreds of thousands of children, like seven month old Arden are

hollowed out by hunger and sickness. If the rains fail again, the war in Europe could push this crisis into a catastrophe even into famine. Aid

agencies depend heavily on grain from Ukraine.

(END VIDEOTAPE)

MCKENZIE: All of these countries have very complex reasons for this food insecurity. It's not of course, just because of the conflict in Ukraine.

But Julia, the issue here really is that on top of the pen already being felt, whether it's by a drought and climate change in Somalia, or in

Nigeria's case, governance issues and inflationary pressure, it's just piling on more pain onto these already high prices.

Now, that excellent economist that told me that the next few months will be key, it might not be a case of food shortages, per se, there should be

enough food around to be distributed. But the price will be such that many more people millions potentially around the world won't be able to afford

that food.

And he really did stress the issue of fertilizer costs if sanctions and trade complications on the Russian side don't get fertilizer out. It could

take time for countries like the U.S., China and Canada to fill that gap. And normally what happens is if there's a lack of food supply, prices go up

and producers expand.

But if the inputs for that production in this case, fertilizer are sky high, they may not do that. So in the months ahead, particularly if this

conflict draws on for many months, you could see a very serious consequence in food prices and food security. And not just in the African context, but

in the Middle East, Central Asia, and even Latin America, Julia.

CHATTERLEY: Yes, and what other producing nations must not do is hoard whether it's grain or fertilizers too, which is a conversation that we've

also had with the World Food Program recently as well and the World Bank, David McKenzie, thank you for that report vitally important.

OK, straight ahead Russia's new threat as Finland and Sweden consider joining NATO, the Former Finnish Prime Minister Alexander Stubb gives his

take next.

(COMMERCIAL BREAK)

[09:15:00]

CHATTERLEY: Welcome back. Russia warning it will bolster its defenses in the Baltic region including deploying nuclear weapons if Sweden and Finland

join NATO. Finland, which shares a long border with Russia and Sweden are considering joining the alliance as the war in Ukraine drastically

increased concerns about security.

Their leaders say decisions on whether to apply could be made in a matter of weeks. Former Finnish Prime Minister Alexander Stubb joins us now, Alex,

great to have you on the show.

Threats have been made many times in Finland's direction, but perhaps never more potent. How concerned are you by the threat?

ALEXANDER STUBB, FORMER FINNISH PRIME MINISTER: Well, not very concerned, I think, you know, we have a very resilient society. And what we're expecting

when we file, the NATO application, within a few weeks are three forms of threat, one of these sorts of verbal or information threats two are hybrid

threats, and three are cyber threats.

And I think all three will be very prevalent during the so called grey period from when we apply to when we become members.

CHATTERLEY: Let's talk about the gray period, because this is important. You have this moment when the nation applies to be a NATO member, and then

the point upon which they become a NATO member and as you refer to it a great period.

Surely there has to be security guarantees made in that interim period. So that the message is we may not yet be a NATO member, but we're protected.

STUBB: Yes, I mean, there are a couple of things that we've kept in mind throughout. The first one is, of course, we have a very strong standing

military, 900,000, reserves, and 280,000 that can be mobilized within a matter of days, including a very strong air force, land and sea force.

Then the second one is that our political leadership has, during the past few months, basically been engaged in diplomatic conversations and getting

what I call implicit security guarantees from the likes of the United States, the United Kingdom, probably France, and of course, NATO itself.

So I think we're pretty well covered. And also it's very important that our political leadership communicates to the general public that there are

going to be these kinds of threats.

We saw one of them actually last Friday, when the home pages of the Finnish foreign ministry and Defense Minister down when Zelenskyy was speaking to

the Finnish Parliament.

CHATTERLEY: Talk about the implicit security guarantees. Do you trust those in light of what we've seen with Ukraine?

STUBB: Yes, definitely and there are many reasons for it. I mean, you know, we have a lot of good bilateral agreements. For instance, with Sweden, we

participate in Jeff together with the United Kingdom. And I'm sure that the United States will help out if need be.

I think it's more about providing material, if anything, were to happen that would, you know, threaten our security. But to be honest, I don't

think that's going to happen, you know, the Russians can't be basically fighting on two fronts.

So we have to understand that in a war, where the Russian military actually seems quite weak, they can't be multitasking down in Ukraine and up in

northeastern Europe.

CHATTERLEY: It's a valid point; you also mentioned the relative size of your military to population is pretty significant.

[09:20:00]

CHATTERLEY: Let's be clear, but you're also mentioning on the second, on the other hand, cyber-attacks and the fact that actually you faced cyber-

attacks in Finland last week as a result of President Zelenskyy speaking to Parliament. Is the country prepared, protected against the risk of cyber-

attacks, particularly if they escalate?

STUBB: Well, as far as we obviously can, I mean, I don't have the latest intelligence. But I remember when I was in office, I was quite impressed

with the types of defense mechanisms that we're able to do, because the basic thinking, I think of our military is that everything in today's world

can be weaponized.

So we talk about this sort of age of - peace. And that means that you can use energy as a weapon, you can use human shields, you know, sending asylum

seekers across the border, as a weapon.

And then of course, you can do cyber-attacks and send out malware. And the key there is to be resilient to understand where they're coming from, and

be prepared to change tack when necessary.

And you know, never underestimate the capacity of the Finnish authorities to stay cool, calm and collected in the face of adversity. You kind of have

to have that mentality when you have 1340 kilometers of border with Russia.

CHATTERLEY: Yes, you grow that I think over time, to your point, you've been fighting for NATO membership for what the best part of three decades.

And, you know, I remember a conversation with you many years ago where you'd all but given up hope.

The pendulum swing in public opinion has been so dramatic as a result of what we've seen in Ukraine and the Russian invasion. I mean, we're talking

about it like it's a done deal. Is it a done deal? And do you think there's anything that that could perhaps swing that pendulum back, a threat perhaps

--.

STUBB: Yes, I guess the first observation is to say that you just almost revealed my age that I've been in favor of NATO membership for most of my

adult life. So that makes it three decades.

CHATTERLEY: When you're a baby.

STUBB: And you're absolutely right. You know, I mean, I did sort of lose hope at some stage say around, you know, the early 2010. So I thought, you

know, this is done deal we're never going to go in. But things happen very quickly. I do think it's a done deal.

I'm convinced that Finland will file an application within a few weeks latest May, and by the end of this year, we will be members. And the shift

is based on what I call rational fear. So our NATO membership was basically decided on the 24th of February when Russia and Putin attacked Ukraine.

And remember, the Finns are very capable of doing big security, political changes in the time, and linchpin of history. We declared independence in

1917. In the middle of the Bolshevik Revolution, we accepted peace in 1944, from Stalin by losing territory, or by the way my grandparents and my dad

were born.

And then when the Cold War ended, we immediately became EU members. And now we're doing the same with NATO. And for us, it's very rational, it's very

common, and the train has left the station and we're on the way to NATO headquarters.

CHATTERLEY: Even if peace were declared, it wouldn't change anything.

STUBB: Oh, no, no, it wouldn't change because we have to understand that we are in a semi-permanent state of affairs with a divided Europe on one side

of the new Iron Curtain. We have an authoritarian, totalitarian, aggressive, imperialistic, and revisionist Russia.

And on the other side of the curtain, we have roughly 35 democracies, countries that want to cooperate, abide by international law and believe in

freedom and the values of liberal democracy. So this is going to be a permanent state of affairs, we have to maximize our security.

And we do that by having a strong independent defense. And by joining NATO, regardless of whether there is peace or not.

CHATTERLEY: Make sense to me, one more question. President Putin said today that Europe has no choice, no alternative to Russian gas and oil. And I

mentioned that that's evidence in the lack of oil and gas sanctions that we've seen so far from Europe.

Do you see that Germany and nations like it that are so hugely reliant on Russian energy stand in the way of perhaps ending this war and preventing

the kind of sanctions that could have a true and material impact on the Russian economy?

STUBB: The answer is a double no; the first no goes to Putin. I think he's when being poorly briefed. Yes, we are dependent on Russian energy. But we

can also shift that with time.

The second no is to say that no matter how big the onslaught of sanctions, that is not going to be the make or break. It's just part and parcel of a

holistic approach of how we can end the war.

So I do not think that Germany stands in the way and what we're seeing now is a waning away from Russian gas and oil.

[09:25:00]

STUBB: Remember, these two are going to be stranded assets in any case within one or two decades. So the inevitable is just going to happen faster

than we expected.

CHATTERLEY: Alexander Stubb, former Finnish Prime Minister, Sir, thank you so much and a beautiful apartment behind you. I have to say in happy times,

you would have talked about those books. Talk to you soon. Thank you, sir.

STUBB: Thanks, bye.

CHATTERLEY: Bye. Coming up, thousands of people in southeastern Ukraine rely on this company for their very survival. How a family and green firm

struggles to keep the flour flowing and to keep feeding civilians and the Ukrainian troops, next.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back, the U.S. is working to assess the damage done to the flagship of the Russians Navy Black Sea Fleet. The Pentagon believes

there was an explosion onboard the Moskva yesterday.

Ukraine says it hit the vessel with missiles, Russia says the damage came from an onboard fire. The U.S. says the chip is still sea worthy and making

its way across the Black Sea. Russia claims all crew members were evacuated.

The IMF World Bank and other organizations are demanding coordinated global action to ensure that the most vulnerable nations get the food they need as

the Ukraine war drags on. Ukraine and Russia grow more than a quarter of the world's wheat.

But supply disruptions are already pushing prices to multi year highs. Wheat currently off the recent highs hit in early March, but still up by

more than 70 percent over the past year. Prices for corn and soybeans are also as you can see up significantly.

Now rising prices would typically translate into higher profits for farmers and other food suppliers. But the rising costs of fuel and fertilizers they

use are also cutting into margins. And Ukrainian farmers are they're dealing with tragedy too, a shooting war taking place on the very land upon

which they earn their living.

[09:30:00]

CHATTERLEY: Granaries have been destroyed, and many of the people who work in the food industry there have left their jobs to fight. Shamil Malachiyev

joins us now, he's the co-owner of one of the largest green mills in southern Ukraine, which delivers flower, pasta and baked goods across the

war torn region.

Shamil, great to have you on the show, thank you so much. And thank you for your time, because I know you are incredibly busy. Talk me through this,

because if you don't go to work, then people don't get fed. And that includes Ukraine's military too.

SHAMIL MALACHIYEV, GRAIN MILL OPERATOR: Thank you, Julia, thank you for introduction. It's, it's great to be here, it's great to be able to, you

know, shine a little bit of light under the current situation in Ukraine holidays for entrepreneurs and business owners.

Since the start of the war, you know, today, today is the 50th day, actually, and we've been, we've been adapting I can't call it any other

way. It's, it's been, it's been 50 days of constant adaptation, looking at where the military action is taking place, and looking at what was what

best can you do to make sure that you continue providing people with food, you continue providing military armies with food, to make sure that they

can protect, well, our part of Ukraine.

As you might know, we are located currently in the south of Ukraine in the city of Mykolaiv. And currently, this is one of the three main points of

fighting for the Russians. This is where they tried to, you know, control the Kherson region.

CHATTERLEY: Yes.

MALACHIYEV: And now we are preparing for, for quite a long defensive positioning from Mykolaiv region. So, everybody, like every person living

in Mykolaiv is doing their best to make sure they, they can do something to help.

CHATTERLEY: Explain what that means, because I believe over a third of your workers either fled to safer areas to your point, you're in a very

dangerous place where there is and has been intense fighting.

That means the workers that remain are working harder. I know you have to pay them more, because they're frightened, people surely are frightened to

go into work every day, you must be frightened. How does that work? And how often do they have to go to, to bomb shelters.

MALACHIYEV: Since the start, you know, the scariest moment was probably the first, the first couple of days. This is where when was the first time at 5

a.m. when we started hearing you know, shells dropping off all over Ukraine and Mykolaiv region as well.

Everybody was panicking trying to figure out what to do. Some of our workers have moved away from the city itself to like, to the villages that

are in Mykolaiv region, some tried to go further away to the western part of Ukraine.

And obviously, some people are trying their best to work remotely, which we appreciate. But most of the people who actually have to deal with

production, you know, operate the lines, the machinery.

I'm really thankful to all of them for staying for showing their support showing their incredible leadership characteristics like the potential

they're showing the best in themselves. We get bombings; we don't know when they're going to happen.

Usually, some of them happen from around nine till 12 and then another round start at around six to eight in the evening.

Obviously, it's not timed, so something can happen in between. But all of our employees every morning, you know, we have a common chat for the whole

group. And once we see that there are no sirens, there haven't been any shellings.

Like currently, we're calling everyone to come to the factory and to continue producing food.

Obviously for most of the employees, we had to double the salaries that they're getting, because we understand how much stress and how much risk

they're going through on the journey to work every day.

And this is the minimum we can do to show our support and our appreciation for their work because they're doing fantastic things. They're producing so

much wheat flour and pasta and cookies and every day we are given away as humanitarian needs where every day we are feeding.

Our people were cooperating with restaurants, who like pivoted all of their businesses towards feeding towards doing like what they can to volunteer to

provide the food for those in need.

[09:35:00]

MALACHIYEV: So we're supplying them with wheat flour and there are then baking bread bonds and supply them to people in need, all around the place.

Literally 70 percent of all citizens of Mykolaiv region, they started volunteering, doing whatever they can to, to do something, at least

something is the kind of like mission, a calling that all of us feel inside to protect our motherland to help each other. We really started feeling

that in unity, you know, we get the strength to carry on.

CHATTERLEY: That community spirit is such a beacon of light in such dark times. I know that 60 percent, around 60 percent of what you're producing,

is going to the military to. I think one of the big concerns that that people have are how are your farmers operating?

How are they going to harvest? How are they going to replant for next year? What kind of reserves and supplies do you have? And even once you've

produced what you're producing, do you have the ability to get it out to people that aren't perhaps just in the local area to transport it? Can you

give me a sense of all of those things, and I appreciate there were a lot of questions there.

MALACHIYEV: Well, first of all, with the logistics, ever since the war started, we've had literally 70 percent of the directions on which we can

ship our goods closed down. And the bridges were exploded; some of the directions were taken over by Russian forces.

So pretty much the only direction we cannot take is towards Odessa. So if you look at, like who we are supplying at the moment, 70 percent of them

are new customers, their customers around the Mykolaiv region we didn't used to, well, we didn't work with before.

They used to like work with other suppliers. But now with the logistics problems coming into place with the town being half closed, they have to

rely on our supply for our help to function.

With the military orders coming to place, this is something that we've never worked with never encountered. And I really hope like the rest of the

planet never has to encounter with anything like this where you have to like feed a large number of military, because, you know, there is some

dangers of attack.

But we've increased our production capacity, nearly by 50 percent, make sure that we can count for the Army for the humanitarian aid and also for

the distribution that goes towards - shops that goes towards Odessa shops and to the Western Ukraine.

Because at the moment, a lot of large, like volunteering organizations, they have to feed all the refugees because we have not only the refugees

that fled outside of Ukraine, but also people who have shifted within the Ukraine as well.

And the demand for the basic products is increased in the western part of Ukraine, so we're trying our best to make sure that yes--

CHATTERLEY: I understand who's paying for this, are you losing money? I know it's not about the money, but you have to remain viable financially to

be able to keep doing this. Are you being paid for this and supported financially?

MALACHIYEV: With the distribution, like with the current working with supermarkets and shops, we're getting paid, obviously, we cut down our

profit margin to the minimum, with the army we are supplying at the prime cost.

And our prime cost has increased a little bit because in wheat flour business, you have the grain you have 20 percent which is brand, which is

usually exported. But now with Odessa been closed, we can't explore that brand.

So it puts, you know, another pressure on the prime cost as well, as well as the salaries, for example. And the remaining humanitarian aid is

something that we've been doing for two and a half weeks out of our own pocket.

And then when we realize that, you know, it's around for $8,000 every day that you're giving out all the volunteering organization. We've started

fundraising bit by bit.

And two, two and a half weeks ago, we even received a $50,000 donation from the Nova Ukraine fund from the Silicon Valley. So that's a huge help in the

U.S. And now we're doing our best to fundraise to make sure that we have enough strength to continuing to support humanitarian.

Because we see all these people we see the smiles we see, you know, all the people who are getting the food. And, you know, in the war time you only

think about how much good connect there. Once this is over we'll be able to rebuild will make up for all of the like loss potential, will try to new

country and better organization.

[09:40:00]

CHATTERLEY: I believe you, your worries, you're keeping people alive. One thing that occurred to me show me and I think it goes to, you can explain

how you're managing to keep morale up among your workers in dangerous times is, we were just showing the video of your plant and it looks like any kind

of big infrastructure and given how critical you are to feeding troops.

You mentioned the danger of supplying Ukrainian forces. Are you worried that you could become a target for Russian attacks? And what do you tell

your workers, you might be afraid of that too.

MALACHIYEV: We're scared of that daily, really, every night, we check the messages, we check the security people to make sure that you know, the

planted safe whenever we hear explosions.

Every day, we're just hoping that nothing happens to the factory that we can continue going to work. Your psychology, it works in a little bit

different way during the war. So during the peaceful time, you would be able to kind of like assess everything with a cold mind and say, OK, it

might be risky.

But during the wartime, you kind of all of this goes in the background, and you know what you have to do, and you just do that nonetheless. And

whenever we hear sirens at the workplace, you know, we just go to the bunkers, and wait for an hour, an hour and a half, depending on how long it

might take.

And then we could come back and continue working, we're trying to do our best to provide security to the people. And each one of our workers, you

know, it's the culture of the company, they know what they're doing.

You know, they know how important their role is, into making sure that you know all the people have enough food to continue fighting to, to feel well.

And, you know, during the war time, it's, I think you would it's quite healthy for your psychology, like psyche, to become to be busy with work,

and to do to make sure that you're doing something useful.

And inside, you're feeling I'm contributing, I'm not just sitting in one place, and it kind of takes your mind away from the worries of when you

when you are sitting at home, while the sirens, this is the worst.

This is where you have no certainty of what's going to happen. But once whilst you're at work, all these thoughts kind of like go away and you're

just concentrating being productive. And it's no time for quarrels or anything like that.

We work together as a team as one unit. And then all of this stuff, they are my heroes reading each and every single worker, every single volunteer.

And I'm shocked and I'm surprised and pleasantly surprised by what how everybody's transformed. And yes--

CHATTERLEY: No, I was going to say, this war is creating many heroes. You literally said exactly what I was thinking. Thank you for what you're doing

and for what your teams are doing and for your bravery in the face of such challenges.

We'll stay in touch. Stay safe, please. And thank you. The - and the family-run waiting Greenville and bakery in Mykolaiv, Ukraine thank you

Shamil. We're back after this.

(COMMERCIAL BREAK)

[09:45:00]

CHATTERLEY: Welcome back, let me bring you up to speed with some of the other stories that making headlines around the world. In Shanghai, COVID

infections hitting a new high more than 27,000 in a single day most of the city remains under a strict lockdown.

And surrounding regions are imposing restrictions to, at least 44 cities across China now under some sort of lockdown. CNN's David Culver is with us

from Shanghai. David, you and I were talking about this yesterday.

And I'm sure many of our viewers will have seen quite frightening video on social media of a man being removed from his apartment. We're not showing

it because we haven't verified it. But these kinds of stories and images do spread fear. Is there any sign that this is coming to any kind of end or

lessening at least?

DAVID CULVER, CNN CORRESPONDENT: You know, and yes, and rhetoric, you hear what they say. And they're trying to ease these lockdown and these

restrictions Julia. But certainly, they're continuing to go forward. I mean, we're living in the midst of one right now.

And so the restrictions are still very much in place. And I think that's why it's so concerning. And you pointed it out there that Shanghai has set

another record high in the daily COVID case count as it's battling this Omicron fueled surge.

And the severe lockdowns, they're continuing for most of the 25 million people living in this metropolis. You've got residents still battling to

try to get access to basic necessities talking food and medicine.

And the panic and uncertainty is also growing. It's spread well beyond Shanghai. You mentioned there are 44 other Chinese cities likewise under

either full or partial lockdown, so as to keep in line with Beijing's zero COVID policy.

Now, many of these are along China's coast and so that's impacted major ports defecting shipping that in turn adding to the global supply chain

issues and if for example, a neighboring pseudo city you've got officials there urging their 12.7 million residents, stay at home, stop all

unnecessary movements.

Folks then turn into trying to stock up as quickly as possible after they saw the horror stories from Shanghai residents. They're rushing to

supermarkets shelves quickly emptied.

Similar scenes playing out in the south Guangzhou with a city of more than 15 million is undergoing a third round of city wide mass testing. And then

you get two cities in northeastern Jilin Province, Changchun and Jilin City, this is an industrial hub.

They remain hotspots despite lockdown measures they're having been in place get this for more than a month. Changchun has quarantined by the way more

than 200,000 people since the start of this most recent outbreak of - in Shanghai as COVID cases are continuing to rise.

The recent anger, the frustration, the fatigue, Julia, that you and I have been talking about, well, that now has police warning that anyone violating

lockdown orders would be punished in strict accordance with the law. And to that kind of goes to that video, you're referencing there that police are

trying to deter.

CHATTERLEY: Yes. I mean, in the west now the horror of COVID by and large is gone. It feels like the pain and horror of COVID is being amplified by

the measures that we continue to see in China as you yourself have experienced.

CULVER: I think you're right.

CHATTERLEY: Yes, David Culver, in Shanghai first there. Thank you. As always, we're back after this.

(COMMERCIAL BREAK)

[09:50:00]

CHATTERLEY: Welcome back, call it a day on global markets fit for a tweet. I'll explain U.S.

And European stocks mixed as investors get most encouraging earnings news from banking giants Goldman Sachs, Morgan Stanley and Citigroup.

The number is helping offset a cautious assessment of the U.S. economy yesterday from the Head of JP Morgan Jamie Dimon. Today's main event for

investors coming a few hours ago, however, Elon Musk announcing a more than $43 billion bid to buy up the rest of the Twitter shares that he doesn't

not yet own.

And then take the company private where they heard that before. Musk calls the more than $54 a share offers his best and final bit. Musk is already

Twitter's largest shareholder owning more than 9 percent of the firm.

But shares are not getting much of a bounce, lots of questions about this offer. Anna Stewart joins me now. Anna, our collective heads I think

exploded when this came through.

And the share price was higher a lot earlier. But as people have continued to ask questions and wonder whether he's really means, whether he's joking

or whether he's got the money, so this team has come out of that share price, what do we know? And what don't we that are going to take you

longer?

ANNA STEWART, CNN REPORTER: It really will. I mean, given us Elon Musk's story, thankfully, we're not short on Elon Musk's thoughts on all of this

even within the SEC filing, which makes very clear that he can withdraw this proposal at any time.

And attached to the filing was actually a voice transcript from Elon Musk saying and we'll bring you the first bit. I am not playing the back and

forth game. I have moved straight to the end. It is a high price and your shareholders will love it.

It is a high price. But actually some analysts are speaking to you today do question it pointed out that of course twitch - shares were around $70

around a year ago.

And I'll bring you a little bit more of it though. He then goes on to say if the deal doesn't work, and I would need to reconsider my position as a

shareholder. This is not a threat. It's simply not a good investment without the changes that need to be made.

So that big steak that he has built up of over 9 percent worth nearly $3 billion that could effectively be dumped back onto the market. And one

analyst I spoke to Neal Kaplan from --Mirabeau equity research questions whether it's all a big publicity stunt.

He says the price, particularly the $4.20, at the end of $54.20 is a clear reference to when Musk said he would buy out Tesla. For $4.20 a share and

4.20 of course the date of cannabis day in the U.S. so call it conspiracy theory, call it all madness.

What a story that is grips the markets looking at that share price, I think investors are questioning this as well.

CHATTERLEY: Yes. And I saw one person many of since subsequently asked if he playing? Of course he's playing he's always playing, that's the 4.20

playfulness. The question is will he follow through if he can get the financing?

And do twitter and the board at Twitter I mean, it's tough to argue with this 54 percent premium on where it was trading yesterday. If he's got the

money, surely you have to sell, Anna.

STEWART: Yes. And if they don't accept this, well, do they then have to sell to someone else? I mean, that's certainly one suggestion we've had.

And of course, what does this mean for freedom of speech for Twitter?

If they say no to this is that based on where they would take where Elon Musk would take the company? Can you have a billionaire as adversarial and

provocative as Elon Musk taking control of Twitter?

A platform he is used to troll all sorts of people, including, of course, the Canadian Prime Minister who he compared to Adolf Hitler. He's getting

to SEC trouble; he's been fined tens of millions of dollars for misleading investors on Twitter.

Is this the man that should be taken over? That is a big question for shareholders for the board also for regulators and frankly the users of

Twitter.

[09:55:00]

CHATTERLEY: Yes. Show me the money. Then call me the regulators. And then we'll all in the interpreters go and lie down in a darkened room and wait.

Anna Stewart, thank you for that. OK, and finally one man in Ukraine is thanking rescuers after this sweet reunion. Police say the 77 year old

miraculously survived a Russian attack in the Donetsk region that reduced his home to rubble. Then another miracle, his dog was pulled from the

wreckage alive.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm grateful to these guys, they worked fast, disconnected everything. Huge thanks to them.

(END VIDEO CLIP)

CHATTERLEY: Police say the man and the puppy are given medical care and are both doing well. That's it for the show, stay with CNN. "Connect the World"

with Becky Anderson is up next.

(COMMERCIAL BREAK)

END