World leaders are trying to save the Black Sea grain deal

World leaders are trying to save an international agreement that would allow Ukraine to supply grain by sea. They face a key problem: the agreement, which has already been extended three times, is almost inoperative. Termination of the agreement could lead to a reduction in production in some regions of Ukraine in 2024. Bloomberg writes about this.

Ukraine’s Black Sea ports are almost empty, and some ships carrying grain are being inspected by force. The agreement expires on July 17. Currently, the EU, the US and the UN are in favor of its extension, while Russia is against it.

According to the newspaper, Russian officials continue to oppose the extension of the agreement, and Kyiv accuses Moscow of trying to sabotage it. Since the agreement was signed, almost 33 million tons of grain have been supplied to world markets, which has helped to reduce food prices and support the sector.

The termination of the deal could allegedly lead to higher costs for Ukrainian farmers, with some regions of Ukraine cutting production in 2024. In an effort to save the deal, EU and UN officials are considering making concessions to the sanctioned Rosselkhozbank. Even so, the Russian ministry has rejected the compromise, saying it is unworkable. The suspension of supplies will result in more harvest being sent to Ukraine’s river ports on the Danube, as well as to rail and road transit across the border with the EU.

In addition, due to the termination of the grain deal, food will have to be delivered by rail or road to the EU. Kernel Holding SA, the country’s main sunflower oil exporter, said it is ready to continue deliveries if the military and the Infrastructure Ministry approve it.

In June, the Ukrainian government set up a $547 million insurance fund to compensate companies whose ships are sailing to the country’s Black Sea ports if the deal is suspended.

On July 6, the Joint Coordination Center reports that the Russians have shut down the grain corridor from Ukraine.

The last inspections of ships entering the grain corridor were recorded on June 28. They were the Turkish bulk carrier TQ Samsun and the TK Majestic flying the flag of St. Kitts and Nevis, which were heading to the port of Odesa.

Two inspections were carried out in the opposite direction in July: On July 4, the bulk carrier Akdeniz M with 30,000 tons of wheat to Turkey from Odesa and on July 2, the bulk carrier Agapi S with 55,88 thousand tons of corn to the Netherlands from the port of Chornomorsk.

Tags: Black Sea grain deal