Ukraine Black Sea grain export deal extended
Ukraine says negotiators from Kyiv and Moscow have agreed to prolong a UN and Turkish-brokered Black Sea grain export agreement, a crucial step to alleviating a global food crisis triggered by the conflict.
“The initiative for safe transportation of agricultural products across the Black Sea has been extended for another 120 days,” Oleksandr Kubrakov, Ukraine’s infrastructure minister, said on Thursday. “This decision was just taken in Istanbul. The UN and Turkey remained guarantors of the initiative,” he added.
The agreement was initially brokered in July by the UN and Ankara to end Russia’s blockade of Ukraine’s ports following Moscow’s full-scale invasion of its neighbour in February. Ukraine is a leading exporter of grain and other agricultural products. Food security experts have warned that shortages triggered by the war will lead to further price rises, with serious consequences for poorer countries already hit hard by the impact of climate change and the Covid-19 pandemic.
Since the deal took effect on August 1 “Ukraine has exported more than 11mn tonnes of agricultural products to 38 countries around the world”, Kubrakov said. “This is a significant amount, but not enough. The world market cannot replace Ukrainian agricultural products in the near future. At the same time, it is possible to increase the amount of our food for the world,” he added.
Grain prices fell after the deal was extended. Benchmark wheat futures traded in Chicago declined 3 per cent to $7.94 a bushel while corn dropped 1.5 per cent to $6.56 a bushel.
Ukrainian president Volodymyr Zelenskyy confirmed the agreement in a tweet on Thursday. Kubrakov said Ukraine was still pushing for the agreement to be extended for at least a year and for it to include ports in the Mykolayiv region in addition to the three ports in Odesa province that were part of the deal.
Grain Deal will be prolonged for 120 days. 🇺🇦 together with @antonioguterres and @RTErdogan made key decision in the global fight against the food crisis. Waiting for official announcement from partners – 🇹🇷 and 🇺🇳.
— Володимир Зеленський (@ZelenskyyUa) November 17, 2022
UN secretary-general António Guterres said: “I welcome the agreement by all parties to continue the Black Sea Grain Initiative to facilitate the safe navigation of export of grain, foodstuffs and fertilisers from Ukraine.”
The announcements came as Russia launched the latest barrage of missile and “kamikaze” drone strikes on electricity infrastructure across Ukraine, in a bid to cripple the country’s power supply as winter nears.
Denys Shmyhal, Ukraine’s prime minister, said at an investment conference in Kyiv that the strikes had also targeted natural gas production facilities, without identifying the locations.
In a separate agreement with Russia, the UN has begun shipping fertiliser to African nations that has been stuck in European ports since the start of the war. The UN worked with the US, UK and EU to create a general licence to assure private companies that there was a “blanket exemption” from sanctions for Russian food and fertiliser, and to encourage insurers to cover Russian-flagged vessels, a UN source said.
Russia’s President Vladimir Putin had said western sanctions had hampered the country’s agricultural sales, even though Moscow had grown its export volumes since the war began. The sanctions do not directly target Russia’s exports but have created additional barriers for payments, shipping and insurance that Moscow has pushed the UN to resolve.
“There are statements from the US, UK and EU about carve-outs in the sanctions regime for Russian exporters of grain and fertiliser. This important progress and this work will be finalised when all the direct and indirect obstacles are completely removed,” Kremlin spokesman Dmitry Peskov told reporters, according to Interfax.
Ukraine and Russia still need to agree to reopen a pipeline for ammonia that travels through Ukraine, the UN source said. Ammonia, made from natural gas, is a feedstock for nitrogen fertiliser, but soaring gas prices have seen European fertiliser makers slash production by 70 per cent this year.
Small farmers in poorer nations have been especially hard hit by the “fertiliser crunch” as prices more than doubled since 2019, the source said, raising fears they will be unable to plant enough food for the next harvest.