EU’s Borrell hopeful of Ukraine grain export deal this week

Russia, Ukraine, Turkey and the UN close to agreement to unblock Ukrainian ports in the Black Sea

The EU High Representative for Foreign Affairs and Security Policy said on Monday that he was hopeful four-way talks between Russia, Ukraine, Turkey, and the UN would reach an agreement this week to unblock the export of grains from Ukrainian ports in the Black Sea.

Speaking on arrival at an EU Foreign Affairs Council in Brussels, Josep Borrell said resuming grain exports was maybe the most important thing the international community was currently facing.

“We are doing whatever we can to support the export of this grain through other ways, through the solidarity lanes, through the Black Sea to Romania and Bulgaria, but that is not enough,” Borrell told journalists.

“I hope that this week, it will be possible to reach an agreement to deblock Odesa and other Ukrainian ports,” he said, adding that “the lives of thousands, more than thousands, tens of thousands of people depend on this agreement.”

“It is not a diplomatic game; it’s an issue of life and death for many human beings,” Borrell said.

He added that Russia would have to deblock and allow Ukrainian grain to be exported. Otherwise, the west would continue to assert that Russia was “using food as a weapon, without any kind of consideration for human lives. This has to be said loudly.”

Talks between the four parties began in Turkey last week, and while real obstacles remain to a deal, they have given the most positive signal that a deal might be possible since Russia invaded Ukraine in February.

Market sources have expressed some skepticism that a deal might be reached given the different agendas of each party in the talks.

Before the war, Ukraine typically exported 6-7 million tonnes of grains and oilseeds a month, mainly via deep seaports in the Black Sea, but since Russia invaded the country on February 24, Ukraine’s deep sea ports have been blocked due to the presence of the Russian navy in the waters nearby and on Snake Island, a strategic point in the Black Sea.

This forced exporters to seek alternative routes, and in May, the European Commission launched an initiative to create so-called “solidarity lanes” to improve the flow of grain out of Ukraine by rail and road via neighboring EU countries.

Volumes remain low, however, and currently, only about 1.5-2 million tonnes of grains and oilseeds a month can be exported from Ukraine via overland routes and smaller shallow water ports.

After Russian forces were evacuated from Snake Island a few weeks ago, it became possible to re-open the Ukrainian Bystre canal that links the Danube river with the Black Sea, but export opportunities via this route also remain limited.

Keep up to date with the latest grain market news, price trends and forecasts by visiting Fastmarkets Agriculture.

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