Ukraine, Turkey and UN Agree on Movement Plan for 16 Vessels from Ukrainian Port- Wheat, Corn Futures Rise

Bloomberg writers Selcan Hacaoglu, Agnieszka de Sousa, and Daryna Krasnolutska reported yesterday that, “Turkey, the UN and others looked for ways to salvage the Ukrainian grain export initiative after Moscow said it would pull out indefinitely following an attack on its Black Sea naval fleet.

“A Russian official didn’t definitely rule out a return, adding to uncertainty around the pact, which has seen more than 9 million tons of grains and other foodstuffs shipped since August. ”

The Bloomberg writers explained that, “Millions of tons of crops are waiting at sea and ports. Over 200 vessels that are part of initiative are now essentially frozen in place, Ukraine’s infrastructure ministry said on Facebook.

“Under the terms of the deal, all vessels need to be inspected before entering or leaving Ukrainian ports.”

Wall Street Journal writers Jared Malsin and Alistair MacDonald reported yesterday that, “Russia’s decision threatens to raise the cost of food globally, putting economic pressure on Ukraine’s Western allies as well as Middle Eastern and Asian countries that are highly dependent on its exports.

“That could deepen a global hunger crisis in which tens of millions of people worldwide have been pushed closer to starvation. The suspension of the deal effectively reimposes a full blockade on Ukraine’s ports, escalating Russia’s use of food as a weapon to pressure Ukrainian allies to cease their support for Ukraine or risk threatening the global food supply.”

Meanwhile, Bloomberg writers Kim Chipman and Tarso Veloso Ribeiro reported yesterday that, “Traders are bracing for a fresh spike in grain prices after Russia’s exit from a deal allowing Ukraine crops to move from the Black Sea to the countries most in need of them roils markets anew.

“The sudden move by Russia has left leaders scrambling to rescue the UN-and-Turkey-brokered agreement credited with saving vulnerable populations from risk of starvation.”

“How much of a price jump is harder to predict since the safe-passage deal was already set to expire in mid-November if no agreement is reached to extend it,” the Bloomberg article said.

Wall Street Journal writers Jared Malsin and Alistair MacDonald reported today that, “The price of wheat and corn rose early Monday even as ships carrying grain left Ukraine’s ports despite Russia saying it would suspend its participation in an agreement that has allowed Ukrainian grain exports for months.

“The price of wheat was up by 5.7% and corn by more than 2.5% in early morning trade.”

The Journal article stated that, “The Joint Coordination Center, which monitors the functioning of a safe corridor for ships carrying grain across the Black Sea, said Turkish, Ukrainian, and U.N. officials agreed on a plan for 16 ships to move on Monday, including 12 outgoing and four incoming vessels on their way to collect grain from Ukraine.”

Financial Times writers William Langley, Nic Fildes and Emiko Terazono reported today that, “Wheat and corn futures traded in Chicago jumped on Monday following Russia’s withdrawal from a UN-backed deal that allowed the passage of million of tonnes of grain through the Black Sea.

“Wheat futures on the Chicago Board of Trade rose as much as 7.7 per cent to $8.93 a bushel on Monday morning, and was later trading up 5.7 per cent at $8.29 a bushel. Corn rose almost 3 per cent to $7 per bushel.”

The FT writers added that, “The UN, Turkey and Ukraine, who had been working together with Russia to move the grain through the Black Sea, informed Moscow that 16 vessels both inbound and outbound were going to move through the grain corridor on Monday. The UN said that some of these ships had set sail.”