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BusinessLine Digital > Blog > Business > Ukrainian Black Sea grain export deal extended
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Ukrainian Black Sea grain export deal extended

BusinessLine.Digital
BusinessLine.Digital
Last updated: 2023/03/19 at 2:07 AM
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Ukraine has been allowed to export grain to world markets by ship despite Russia’s blockade of the Black Sea, the United Nations and the governments of Ukraine and Turkey said on Saturday.

The Black Sea Grain Initiative, agreed in July under the auspices of the United Nations and brokered by Turkey, has enabled Ukraine to send 25 million tonnes of grain and edible oil, easing pressure on global food prices.

Ukraine’s deputy prime minister responsible for infrastructure, Oleksandr Kubrakov, said in a tweet that the agreement had been extended for 120 days.

However, Moscow indicated that it had only agreed to an extension of 60 days. Russian Foreign Ministry spokeswoman Maria Zakharova re-posted a letter she sent to the United Nations earlier this week, saying it was only willing to go beyond 60 days if Russian food and fertilizer flows were cut. There is “concrete progress” in flowing to world markets.

The United Nations confirmed the deal had been rolled out, but did not specify for how long, as did Turkish President Recep Tayyip Erdoğan.

“The deal for the grain corridor was to end today,” Erdogan said in a speech in the Turkish city of Canakkale, Reuters reported. “As a result of our talks with both parties, we have secured an extension of this deal.”

The original agreement reached last year specified that it would continue automatically for 120 days if neither side objected. Ukraine, Turkey and the United Nations supported a full extension. Kiev says the 60-day extension creates too much uncertainty for grain dealers and shippers.

The deal was extended once in November. It allows the export of commercial food and fertilizer, including ammonia, from three Ukrainian ports in the Black Sea – Odessa, Chornomorsk and Yuzhny/Pivdeni.

The Kremlin has been pressing for the reopening of a pipeline to pump ammonia, a feedstock for fertilizer, from Tolyatti in central Russia to Odessa for export. It has also sought an easing of what it claims are Western sanctions on Russian grain exports, even if they are not covered by the sanctions.

The initiative has been a lifeline for Ukrainian farmers and grain traders as alternative export routes via rail and riverine have little capacity and are much more expensive.

To avoid mines the ships are evacuated from authorized ports and then follow an agreed humanitarian corridor south towards Turkey.

Ukrainian officials have complained that Moscow is undermining the deal by ordering its officials to stop inspections of Ukrainian ships as they leave the Black Sea for the Bosphorus. Kiev claimed that Russian inspectors were ordered to work fewer hours with each ship and took more time, delaying scores of ships.

“The Black Sea Grain Initiative, along with a memorandum of understanding to promote Russian food products and fertilizers in global markets, is important for global food security, especially for developing countries,” the UN said.

“We remain strongly committed to both agreements and we urge all parties to redouble their efforts to fully implement them.”

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BusinessLine.Digital March 19, 2023
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