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Progress Reported in Ukrainian Grain Export Talks

FILE PHOTO: Grain is loaded on a truck at the Mlybor flour mill facility in Chernihiv region, Ukraine, May 24, 2022. REUTERS/Edgar Su/File Photo

Progress Reported in Ukrainian Grain Export Talks

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July 13, 2022

By Beril Akman, Megan Durisin and Daryna Krasnolutska (Bloomberg) —

Negotiations over unblocking millions of tons of Ukraine’s grain exports were constructive, according to Ukraine, the United Nations and Turkey, marking an initial step forward in bolstering global food supplies and aiding the country’s beleaguered farm sector.

The talks were held in Turkey Wednesday with representatives from Ukraine, Russia and Turkey, plus the UN. The sides — who agreed on the “main technical principles,” including setting up a monitoring unit in Istanbul — are expected to meet again next week, Turkey’s defense minister said in a statement.

Ukrainian President Volodymyr Zelenskiy said in his daily address to the nation that the country’s delegation had reported some progress, with Ukraine expected to agree on details with the UN “in coming days.”

There has been no statement issued yet from the Kremlin on the outcome of Wednesday’s talks. Russia’s defense ministry said earlier on Twitter that it was taking part in the discussions and had prepared a package of proposals to bring to the table.

Crop shipments from Ukraine — one of the world’s biggest wheat, corn and vegetable-oil exporters — have been severely constrained as Russia’s invasion blocks its Black Sea ports. That sent global food prices to record levels earlier this year and raised worries about rising hunger

Talks over unblocking the ports have been pressing on for months already, and the situation is getting worse. Ukraine is already sitting on at least 22 million tons of grains ready for export while starting the new harvest last month. Ukraine has demanded firm security guarantees that Russian troops won’t attack its ports once it de-mines passages to them. Russia has already damaged some grain terminals at Ukrainian ports with missiles, making future shipments more difficult.

Russia’s foreign ministry had previously talked about demanding that sanctions on Russian trade be relaxed in return for opening the ports. UN Secretary-General Antonio Guterres said that since the war started, he has been “underlining the importance of having Ukraine’s food products and Russian food and fertilizers fully available in world markets.”

While it would take time for trade to return to normal levels if a deal were to be reached, the progress in negotiations offers some optimism for supplies. Grain has been piling up across Ukrainian farms, and agricultural groups have said resuming trade via its major Black Sea hubs is vital to moving substantial volumes. 

Ukraine is typically a major agricultural supplier to regions including Africa, Asia and Europe. The UN’s food-price index has retreated from an all-time high but costs remain well above normal, adding to accelerating inflation worldwide.  

The Kyiv School of Economics last month estimated Ukraine’s farm industry has suffered $4.3 billionin damage from the war. The sector is core to Ukraine’s economy, and the nation’s flag depicts blue skies blanketing yellow farm fields.

“Today is an important and substantive step, a step on the way to a comprehensive agreement,” the UN’s Guterres told journalists in a briefing after the talks. “We still need a lot of goodwill and commitment by all parties. They’ve shown it and I’m encouraged, I’m optimistic. But it’s not yet fully done.”

–With assistance from Firat Kozok and Áine Quinn.

© 2022 Bloomberg L.P.

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