Russia, Ukraine sign Black Sea export deal

TURKEY — Russia and Ukraine have signed a UN-backed deal to resume grain and fertilizer exports via the Black Sea, ending a standoff that has been threatening world food security since Moscow launched its unprovoked onslaught in February.

The agreement, which will be implemented in the next few weeks, was signed in the Turkish city of Istanbul and was brokered by the government in Ankara.

Grain exporters in Ukrainian port cities like Odesa have been unable to ship their goods due to the conflict and an estimated 20 million tonnes of grain earmarked for export is stuck Ukraine.

The result of which has been record-high grain prices and a sharp increase in food insecurity, particularly in the Middle East and Africa, which depend heavily on wheat imports from the Black Sea region.

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The plan is for Ukrainian vessels to guide ships through mined waters, with a localized truce in place so Russia does not attack, with Turkish officials expected to inspect the shipments to rule out any weapons smuggling.

The deal reportedly includes a reduction in Western economic sanctions that have been imposed on Russia since the invasion, which it has claimed have slowed its food and fertilizer exports.

UN Secretary-General Antonio Guterres said the deal will bring relief for developing countries and help stabilize global food prices, “which were already at record levels even before the war— a true nightmare for developing countries.”

The possible softening of prices would add to an already positive picture of global grain prices, which have come off from the record levels seen in weeks following Russia’s invasion of Ukraine.

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The United Nation’s Food and Agriculture Organization Global Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, is on a third monthly decline in June, down 2% from the previous month.

Still, this is up 23% year on year, which means that the recent deal and possible resumption of trade would bring much-needed relief to the grains market.

Even if the agreement holds and grain ships are allowed to flow freely in and out of Ukrainian ports, there is still concern that the ongoing war will severely impact Ukraine’s ability to harvest its current crop.

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With farmers struggling to complete their harvest, particularly in the war-torn sections of Ukraine, and with reports of Russian troops setting fire to Ukrainian wheat fields, the Foreign Agricultural Service of the US Department of Agriculture projects Ukraine’s 2022-23 wheat crop at 19.5 million tonnes, well below last year’s 33 million and, if realized, the smallest in 10 years.

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