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Black Sea Grain Deal in Focus

Bloomberg writers Baris Balci and Olesia Safronova reported on Saturday that, “Turkey wants the safe-transit deal for Ukrainian grain exports from Black Sea ports extended for three months instead of two, said President Recep Tayyip Erdogan.

“‘I’m hopeful for an extension,’ Erdogan said in Istanbul early Saturday in a joint appearance with Ukrainian President Volodymyr Zelenskiy. The pair discussed the grain deal and other matters late Friday after Ukraine’s leader arrived from Slovakia.

“The shipping deal is set to expire on July 17. It’s been a vital lifeline for Ukraine’s agricultural exports that’s seen millions of tons of grains and other commodities exported over the past 11 months.

The Bloomberg article noted that, “Turkey brokered the original deal along with the United Nations. Its termination – which Russia has repeatedly threatened – may lift global food prices given Ukraine’s importance as an exporter of grains.”

Reuters writer Michelle Nichols reported on Friday that, “If Russia does not agree to extend a deal allowing the safe export of grain and fertilizer from Ukrainian ports, it is unlikely Western states will continue cooperating with U.N. officials helping Moscow with its exports, the United Nations aid chief said on Friday.

“Russia has threatened to quit the deal, which expires on July 17, because several demands to dispatch its own grain and fertilizer have not been met. The last three ships traveling under the deal are loading cargoes at the Ukrainian port of Odesa and are likely to depart on Monday.”

Nichols added that, “More than 32 million tonnes of corn, wheat and other grains have been exported by Ukraine under the arrangement. Russia has complained that not enough reaches poor countries, but the United Nations argues that it has benefited those states by helping lower food prices more than 20% globally.”

Meanwhile, Bloomberg writers Megan Durisin and Aine Quinn reported on Thursday that, “Global leaders are racing to salvage an international deal to allow Ukraine’s grain shipments by sea before it expires in less than two weeks.

They face a key problem: the pact, already extended three times, is nearly defunct.

The nation’s Black Sea ports, bustling with ships last autumn, are almost empty as the joint center tasked with approving them buckles in dysfunction.

“As Ukraine Grain Deadline Approaches, Pact Is Already Broken,” by Megan Durisin and Aine Quinn. Bloomberg News (July 6, 2023).

“The few vessels left are being inspected at a trickle. Russian officials continue to rail against the pact’s extension, while Kyiv accuses Moscow of trying to sabotage it.”

“As Ukraine Grain Deadline Approaches, Pact Is Already Broken,” by Megan Durisin and Aine Quinn. Bloomberg News (July 6, 2023).

The Bloomberg article indicated that, “‘We’re going to see some parts of Ukraine decreasing production for 2024 if nothing changes,’ said Kateryna Rybachenko, vice chair of the Ukrainian Agribusiness Club. The country’s grain output is already shrinking under the weight of war, and its exports are set to fall to a decade low. The tumult has prevented farmers from making forward sales of this year’s harvest, she added.”

“As Ukraine Grain Deadline Approaches, Pact Is Already Broken,” by Megan Durisin and Aine Quinn. Bloomberg News (July 6, 2023).

Durisin and Quinn explained that, “The export deal whittled down the massive stockpiles that Ukraine amassed after Russia’s invasion halted virtually all seaborne trade. Coupled with crops sold via the EU, Ukraine’s grain exports in the 2022-23 season held even with the one before, ferried across Asia, Africa and Europe.

That progress is fading as the next harvest gets underway: Fewer than two ships a day were cleared in early June, well below export capacity. Moscow has blocked one of the three open ports, and no new ships have been approved since June 26, even as the Ukraine port authority shows nearly 30 registered by the other three sides.”

The Bloomberg article added that, “In an effort to save the agreement, EU and UN officials are considering giving concessions to a sanctioned Russian bank. Even then, the Russian ministry rejected the compromise, saying it’s unworkable.”

And Reuters writer Pavel Polityuk reported on Friday that, “Ukraine’s grain exports for the new 2023/24 season stood at 497,000 metric tons as of July 7, Agriculture Ministry data showed on Friday.

“The volume included 273,000 tons of corn, 177,000 tons of wheat and 46,000 tons of barley.

“The ministry did not give an exact comparison for the same date a year ago but said that Ukraine had exported 318,000 tons of grain as of July 8, 2022.”

On Sunday, Reuters News reported that, “Russia’s Foreign Minister Sergei Lavrov discussed the situation in Ukraine and the Black Sea grain deal in a phone call with his Turkish counterpart Hakan Fidan on Sunday, Russia’s foreign ministry said.”

And on Monday, Reuters reported that, “Expected negotiations between Russian President Vladimir Putin and Turkey’s President Tayyip Erdogan remain the only hope to extend the Black Sea grain deal that is set to expire next week, Russia’s RIA news agency reported on Monday.”

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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