A agreement that allows Ukraine to export grains and other crops from key Black Sea ports has been renewed, although uncertainty surrounds the duration of the latest extension.
(Bloomberg) —
A agreement that allows Ukraine to export grains and other crops from key Black Sea ports has been renewed, although uncertainty surrounds the duration of the latest extension.
Ukraine Infrastructure Minister Oleksandr Kubrakov on Saturday — the last day of the deal’s current run — said the pact will be prolonged for another 120 days, the same length as its prior two terms. That’s despite claims by Russian officials this week that the deal would only be extended for 60 days.
Turkish President Recep Tayyip Erdogan confirmed that the agreement had been renewed, without commenting on its duration. A spokesman for the United Nations secretary-general also said in a statement that the initiative has been extended, without giving a timeline.
A Turkish official, who declined to be identified, later said the extension was only for 60 days. A Kremlin spokesperson didn’t immediately reply to a request for comment.
The Black Sea Grain Initiative has enabled more than 24 million tons of crop shipments from Ukraine since it was first brokered by the United Nations and Turkey in July. That’s contributed to a slump in food-commodity costs that had soared to a record after Russia’s invasion initially disrupted trade flows.
Negotiations over its duration came down to the wire, with the deal due to expire after Saturday. The initial pact was valid for 120 days and then renewed in November until mid-March.
“The ability to export more will help to remove inflationary risks, and as a result, social tensions in many countries of the world,” Kubrakov said.
Agricultural Heavyweight
While Ukraine’s harvests have been battered by the war, it’s still an agricultural heavyweight and ranks among the world’s top shippers of staples from sunflower oil to wheat and corn.
The significant volumes exported through the grain corridor are vital to helping prevent a global hunger crisis from worsening and to reduce pressure on inflation. Still, consumer prices remain high in many nations.
“The agreement for the grain corridor was going to end as of today,” Erdogan said at an event in Gallipoli. “As a result of negotiations with both parties, we’ve managed to extend it. The stability of the agreement is of vital importance.”
As part of the current deal, teams from Ukraine, Russia, the UN and Turkey inspect each ship to help prevent unauthorized cargo or passengers from moving in and out. But Ukrainian traders and authorities have said that Russia is deliberately slowing the pace. That’s hurting Ukrainian farmers’ incomes and raising costs for traders.
The US has also cast blame on Russia for the slowdowns, while Moscow has said the backlog is artificially created by Ukrainian companies.
(An earlier version corrected the spelling of a Ukraine minister.)
–With assistance from Firat Kozok and Áine Quinn.
(Updates with details on duration from first paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.