The USDA’s Foreign Agricultural Service (FAS) indicated in a report this week, “Brazil: Grain and Feed Update,” that, "Brazilian agricultural production is expected to continue growing in 2023, maintaining the…
Wall Street Journal writer Jared Malsin reported today that, “Russian Foreign Minister Sergei Lavrov began talks with Turkish officials on Wednesday toward a possible deal to create a sea lane to export grain from Ukraine as a part of a United Nations-backed effort to address a global food crisis.
“The potential agreement would involve Turkish warships demining Ukrainian ports and creating a safe passage for ships carrying wheat and other products across the Black Sea.
“But Ukraine hasn’t consented to the possible deal between Turkey and Russia, saying that it needs guarantees that Russia wouldn’t use a potential safe corridor to launch additional attacks.”
Malsin noted that, “The stakes of a possible deal are enormous, with a significant portion of the world’s food supply on the line. Russia’s invasion left around 20 million metric tons of grain and seeds stranded in Ukrainian territory seized by Russia or cut off from the Black Sea ports through which it is normally exported.”
The Journal article added that, “The Black Sea route is one of an array of options that the U.S. and other Western nations are considering to export stranded wheat from Ukraine. An alternative plan would involve exporting grain via railroad through Belarus. That option has also encountered resistance from Ukrainian leaders who oppose lifting sanctions on Belarus, which is Russia’s ally in the attack on Ukraine.”
However, Bloomberg writer Selcan Hacaoglu reported today that,
Ukraine is working with partners to establish a humanitarian corridor for grain shipments but it is early to talk about a deal, Agriculture Minister Mykola Solskyi told a Turkish newspaper, warning that failure to open up exports from his nation will lead to ‘catastrophic’ global price increases.
“The Ukrainian minister’s remarks come as Russian Foreign Minister Sergei Lavrov visits Turkey to discuss a proposal on restarting shipments of Ukraine’s agricultural products from the key Black Sea port of Odesa.”
The Bloomberg article pointed out that, “Along with Turkey, the Netherlands has expressed willingness to send warships to escort grain supplies stuck in Ukrainian ports. Dutch Foreign Minister Wopke Hoekstra is also paying a visit to Ankara on Wednesday.”
Meanwhile, Isabel Coles reported in today’s Wall Street Journal that, “European officials blamed Moscow for a looming global food crisis as Russia’s blockade of Ukrainian ports threatens the country’s grain exports, while fighting rages in the east.”
The Journal article indicated that, “Kremlin spokesman Dmitry Peskov said Tuesday that demining would allow ships to load grain and then ‘even with our help, proceed towards international waters.’ He said vessels entering the ports would undergo checks to ensure they weren’t carrying weapons. Mr. Peskov said the Russian side wouldn’t use demined corridors for any offensive operations against seaside cities.
“Russian officials have expressed willingness to ease the blockade if sanctions on Moscow were lifted. Ukraine has questioned whether Russia could be trusted and U.S. and U.K. officials voiced early opposition to such a deal.”
Also in today’s Journal, Vivian Salama, Costas Paris and William Mauldin reported that, “Faced with limited time and few options, the Biden administration is torn over how to deal with a looming food crisis sparked by Russia’s war in Ukraine.
“At the center of a debate between administration officials is a proposal to offer a six-month waiver of sanctions on Belarus’s potash fertilizer industry in the hope that it might compel Belarusian President Alexander Lukashenko to allow a rail corridor for Ukraine’s grain.
“Officials at the State Department don’t want to lift sanctions and say the idea lacks any real potential of working, in part because Mr. Lukashenko is unlikely to agree to a deal because of his close ties to Russian President Vladimir Putin, according to those involved in the discussions. Officials at the White House’s National Security Council believe that while complicated, the idea is among the only viable alternatives to consider.”
Today’s article explained that, “The discussion over alternatives for getting this year’s stockpiles of grain out of Ukraine underscores the dilemma facing policy makers in Washington and in capitals around the world. The problem, officials say, is both helping Ukraine get its grain out of the country, while also dissuading others from buying grain allegedly stolen by Russia.”
Emiko Terazono indicated yesterday at The Financial Times Online that, “Even if there were to be some sort of compromise to shift food out of Ukraine both sides may not strike an agreement until the last minute. The danger is that it turns into a game of chicken, says Ilana Bet-el, political analyst and senior fellow at King’s College London. ‘At a certain point, with so [many countries] depending on grain out of Ukraine, [the west] will have to take the risk and [come to an agreement with Russia].'”
More broadly, Reuters writer Pavel Polityuk reported yesterday that, “Ukraine’s grain, oilseed and vegetable oil exports rose 80% in May month on month 1.743 million tonnes but the volumes are still significantly below the exports in May 2021, the agriculture ministry said on Tuesday.”
The article stated that, “The ministry said on Tuesday 709,600 tonnes of agriculture goods were exported by train, 798,800 tonnes via Danube ports and ferries, and 212,089 tonnes were exported by trucks.
“A total of 327,900 tonnes of goods were exported via the Danube port of Izmail and 398,000 tonnes via another Danube port, Reni.”
And Reuters writer Maytaal Angel reported yesterday that, “Ukraine will only be able to export a maximum 2 million tonnes of grains a month if Russia refuses to lift its blockade of the country’s Black Sea ports, Taras Vysotskyi, Ukraine’s first deputy minister of Agrarian Policy and Food, said on Tuesday.”
“Before Russia invaded Ukraine on Feb. 24, the country was able to export up to 6 million tonnes of grains a month. Since shipments from Ukraine’s Black Sea ports stopped, more than 20 million tonnes of grain are stuck in the country’s silos,” the article said.
The Reuters article added that, “‘I think we reached the limit. The biggest amount we can export is about 2 million tonnes a month,’ Vysotskyi, speaking via video link, told participants at an International Grains Council (IGC) conference in London.
“He said even if Russia’s port blockade is lifted Ukraine would need about six months to demine the waters around its Black Sea ports, meaning the world will remain short of grains for some time.”
The Ukrainians suggested grain could move faster but it would take assurances by Russia including assurances to Ukraine to remove the defensive mines the UA has in place to protect the sea ports along with other assumptions.— Seth Meyer (@SethMeyerMU) June 8, 2022