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Black Sea Export Deal Extended For Another 120 Days

Financial Times writers Roman Olearchyk and Ayla Jean Yackley reported today that, “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 FT writers explained that, “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.

“Ukrainian president Volodymyr Zelenskyy confirmed the agreement in a tweet on Thursday. Kubrakov said Ukraine had requested an extension of the agreement 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 are part of the deal.”

Wall Street Journal writer William Mauldin reported today that, “Grain prices fell sharply after the U.N. announcement. Wheat prices dropped 1.7% to $8.04 a bushel and corn prices were down close to 1% to $6.59 a bushel.”

“It wasn’t immediately clear whether the prolonged agreement had new terms or was an extension of the original pact,” Mauldin explained.

The Journal article reminded readers that, “Russia briefly suspended its role in the grain agreement in late October, threatening to bring the maritime corridor to a halt. Moscow rejoined the deal days later following negotiations with the U.N. and Turkey.”

“Russian Grain Exports Boom While Deal Risk Hobbles Ukraine Flows,” by Aine Quinn and Megan Durisin. Bloomberg News (November 14, 2022).

Reuters writers Michelle Nichols, Emma Farge and Sybille de La Hamaide reported today that, “The 120 day extension was less than the one-year sought by both the United Nations and Ukraine.”

The Reuters article noted that, “Since July, some 11.1 million tonnes of agricultural products have been shipped under the grain deal, including 4.5 million tonnes of corn and 3.2 million tonnes of wheat.

Wheat prices on the Chicago Board of Trade fell following the news that the agreement would be extended with the benchmark contract down 2.75% at $7.95 a bushel while corn prices fell 1.3% to $6.60-1/2 a bushel.”

And Bloomberg writer Daryna Krasnolutska reported today that, “A United Nations-brokered deal allowing exports of Ukrainian grain from the Black Sea is set to be extended for 120 days, according to Ukraine, easing pressure on global food prices.”

“Ukraine Says Grain Deal Will Be Extended for 120 Days,” by Daryna Krasnolutska. Bloomberg News (November 17, 2022).

Chicago wheat futures fell more than 2% as the deal facilitates exports from a major food-growing region. Corn and soybean oil also retreated.”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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