Ukraine officials claim grain deal extended for 120 days

The Black Sea grain corridor initiative will be extended for another 120 days, Ukrainian officials stated Saturday, although statements from Russian authorities cut the extention to 60 days

The Black Sea grain corridor initiative will be extended for another 120 days, Ukrainian officials stated Saturday, although statements from Russian authorities have contradicted the claim, while the United Nations and Turkey have remained non-commital on the key element of the deal.

Nevertheless, the announcements seemingly end a period of weeks of negotiations and a late effort on the part of Russian authorities to cut the agreement’s duration in half to just 60 days.

Market rumors that there would be an agreement had been growing stronger in the last few days as the deadline for agreeing on any extension loomed.

Ukrainian authorities confirmed that the Black Sea grain initiative agreement would be extended for another 120 days via a statement on the official website of the Ukrainian ministry of Infrastructure, adding that Ukraine is thankful to partners for “sticking to the agreements”.

However, the announcement was accompanied by confirmation that an agreement had been reached, but the duration was notably absent.

Disagreement on agreement’s duration

Russian media and authorities, including Maria Zakharova, the head of the information and press department at the Russian foreign affairs ministry, have claimed the agreement was for 60 days.

Ukraine has argued that such a change would effectively mean changing a central tenet of the existing deal and would consequently necessitate an entirely new agreement, which all parties would have to agree to.

Under the Ukrainian extension, the next deadline for the deal would be set for July 17, right at the beginning of the new Black Sea crop marketing year.

If confirmed, the extension of the agreement for a second time brings improved clarity to exports of Ukrainian agricultural produce. Still, the renewed agreement once again focuses minds on challenges caused by the slow inspection pace at Istanbul.

“The main challenge is to speed up inspections in Turkey. This will allow the world to get even more Ukrainian agricultural products. We are also continuing our work on adding the Mykolaiv region ports to the Grain Initiative and expanding the cargo nomenclature,” the note said.

“Ukraine was, and remains, firmly embedded in the world economy and markets. The ability to export more will allow removal of inflationary risks, and as a result, social tension in many countries of the world,” it also said.

Despite the tone, there was no official note on the topic from the UN at the time of publication, and only limited comment from Turkey and Russia, with the Turkish president, Recep Tayyip Erdoğan, confirming an agreement had been reached but skimping on further details.

The announcement comes just days after a Russian official said that the country was prepared to agree to an extension of the deal, but only for 60 days.

That would have meant a significant change to the initial agreement, with Vasiliy Nebenzya, the permanent representative of Russia in the UN, quoted as saying that the deal was not being fulfilled in the way Russia had expected it to be.

He argued that a shorter window would give Western powers 60 days to eliminate all the sanctions related to agriculture exports from Russia, with fertilizer exports being one of Russia’s key complaints.

However, wheat exports have racked up an impressive pace in recent weeks as the country chows through a huge domestic wheat crop that has been estimated at over 100 million tonnes.

Exports and logistics

Prior to the announcement, and paradoxically to Russian demands, Ukrainian authorities had been calling for the deal to be extended for a full year or even an indefinite period, arguing that it would make it easier to plan export bookings and logistics.

Ukrainian authorities were also pushing for an increase in the number of inspection teams available in Istanbul, as well as pushing for the cancellation of the requirement to inspect vessels leaving Ukrainian ports and adding the liberated port of Mykolaiv to the agreement.

Since the start of the war in February 2022, Ukraine’s monthly agriculture export has recovered and been able to hit up to 6 million tonnes per month of exports, with the three re-opened deep sea ports (Odesa, Chornomorsk, and Pivdenniy) augmented by flows from shallow water ports along the Danube river.

Truck and rail deliveries across the border and into neighboring EU nations have also increased.

However, the addition of Mykolaiv and Ochakiv ports could make it possible to increase Ukraine’s monthly export capacity to 8 million tonnes – although industry representatives were not optimistic about such changes and only expected the usual extension of 120 days.

Since the start of the shipments within the agreement, Ukraine has shipped 25 million tonnes of agriculture products, according to UN data, while the biggest receiver so far was China, followed by Spain and Turkey.

While Ukraine also continued supplying agriculture products within the Grain from Ukraine initiative to the low-income countries within UN World Food Program tenders.

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