Black Sea Grain Initiative Extended

By Megan Durisin and Áine Quinn

Mar 18, 2023(Bloomberg) –The agreement allowing Ukraine to export crops out of key Black Sea ports was renewed for another four months despite Russia’s demand for a shorter extension. 

The Black Sea Grain Initiative has enabled more than 24 million tons of crop shipments from Ukraine since it was first brokered by the United Nations and Turkey in July. That has contributed to a slump in food-commodity costs that had soared to a record after Russia’s invasion initially disrupted trade flows.

Negotiations over its duration came down to the wire, with the deal due to expire after Saturday. It will be prolonged for another 120 days, said Ukraine Infrastructure Minister Oleksandr Kubrakov. That’s despite suggestions by Russian officials earlier this week to extend it only 60 days. 

The initial pact was valid for 120 days and then renewed in November until mid-March.

While Ukraine’s harvests have been battered by the war, it’s still an agricultural heavyweight and ranks among the world’s top shippers of staples from sunflower oil to wheat and corn.

The significant volumes exported through the grain corridor are vital to helping prevent a global hunger crisis from worsening and to reduce pressure on inflation. Still, consumer prices remain high in many nations.

Read Also: UN Trade Body Calls for More and Bigger Ships to Prevent Worsening Food Crisis

As part of the current deal, teams from Ukraine, Russia, the UN and Turkey inspect each ship to help prevent unauthorized cargo or passengers from moving in and out. But Ukrainian traders and authorities have said that Russia is purposefully slowing the pace. That’s hurting Ukrainian farmers’ incomes and raising costs for traders.

The US has also cast blame on Russia for the slowdowns, while Moscow has said the backlog is artificially created by Ukrainian companies.

–With assistance from Selcan Hacaoglu.

© 2023 Bloomberg L.P.

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