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Black Sea Grain Discussions “Center Stage”

Wall Street Journal writers Jared Malsin and Alan Cullison reported in today’s paper that, “Russia is piling pressure on Ukraine and Western governments over a deal that reopened key Ukrainian ports for vital grain exports, renewing threats to back out of the agreement that lowered global food prices last year.

“The Russian Defense Ministry on Tuesday accused Ukraine of violating the agreement by using a designated safe corridor in the Black Sea to attack Russian forces in Crimea, a part of Ukraine that Russia seized in 2014.

“The ministry said that on March 23 and April 24, Ukraine launched unmanned surface drone boats from Odessa to attack the Russian Black Sea Fleet’s base in the city of Sevastopol, as well as civilian infrastructure in Crimea. The ministry said that the attacks jeopardize the extension of the agreement that allowed Ukraine to resume its vital exports of food products from three Black Sea ports last year.”

“Russia Renews Threats to Black Sea Grain Deal,” by Jared Malsin and Alan Cullison. The Wall Street Journal (Page A8 – April 26, 2023).

The Journal article noted that, “Ukraine rejected Russia’s accusations that it had violated the agreement as false.”

Malsin and Cullison explained that, “Ukraine and the U.S. government have also accused Russia of sabotaging the functioning of the deal by deliberately slowing down the work of inspectors checking ships entering and exiting the Black Sea at Istanbul.

“The number of ships arriving in Odessa through the corridor each day has halved from an average of 5.9 in September to 2.8 in March, according to data from the Black Sea Institute of Strategic Studies, a Ukrainian think tank.

Vessels are having to wait in line for weeks, accumulating costs. The disruption risks lowering demand for Ukrainian exports because of the heightened uncertainty, analysts said. It has also meant that more grain has been transported by land into Eastern European countries instead of through the maritime corridor, which sowed unrest among local farmers and led to a blockade from Poland and Hungary.”

Also today Reuters writer Naveen Thukral reported today that,

Discussions over the Black Sea grain deal continued to take center stage in agricultural markets.

“Russian Foreign Minister Sergei Lavrov on Tuesday said the situation related to the Black Sea grain deal had reached a deadlock, adding there were still obstacles blocking Russian exports.”

Thukral added that, “Ukraine’s wheat exports are likely to fall 37% to 8.8 million tonnes in the 2023/24 July-June season due to an expected drop in the harvest and ending stocks, APK-Inform consultancy said on Tuesday.

“In its first forecast for the 2023/24 season, the consultancy said Ukraine’s overall grain harvest could fall by 13% to 45.6 million tonnes from the previous season, including 16.2 million tonnes of wheat, 5.2 million tonnes of barley and 22.9 million tonnes of corn.”

The Reuters article also stated that, “Chicago wheat rose for the first time in six sessions on Wednesday, recovering form its lowest in 21 months on bargain buying, but forecasts of rains in parched U.S. Plains limited gains.

“‘There are forecasts of rains in the U.S. Plains which will be beneficial for the winter wheat crop,’ said one Singapore-based trader.”

Also today Reuters writer Pavel Polityuk reported that, “Rainy and cool weather has slowed sowing of spring crops in Ukraine but was favourable for the development of key winter cereals, most of which are in good or perfect conditions, Ukrainian state weather forecasters said on Wednesday.”

“Ukrainian farmers started spring sowing in late February, but only about 1 million hectares of crops were sown by April 21,” the article said.

Meanwhile, Reuters writer Philip Blenkinsop reported yesterday that, “The European Union’s agriculture chief expressed optimism on Tuesday that countries neighbouring Ukraine will shortly accept a deal to allow Ukrainian grain to enter their countries for export elsewhere.”

In other market news, Bloomberg writer Carrington York reported yesterday that, “The Wheat Growers Association is calling for the Canadian government to allow outside workers to weigh and inspect grain at a Vancouver port as a massive strike by public sector workers threatens shipments.

“Unionized inspectors at the Cascadia Terminal have purposely targeted the port, according to a news release by the group, which advocates for farmers. The protests could further tighten global supplies already affected by the war in Ukraine.”

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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