According to the Russian diplomatic mission in Geneva, discussions on a potential extension to a pact allowing the safe transport of grain from Ukraine’s Black Sea ports started on Monday between U.N. representatives and Sergei Vershinin, the deputy foreign minister of Russia.
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By allowing Ukrainian grain that had been blocked by Russia’s invasion to be safely shipped from three Ukrainian ports, the Black Sea grain effort, which was mediated between Russia and Ukraine by the United Nations and Turkey last July, attempted to avert a worldwide food crisis.
On March 18, the agreement, which was extended for a further 120 days in November, must be renewed.
Many diplomats and senior officials, including Turkish Defense Minister Hulusi Akar, are optimistic that the agreement will be extended despite Moscow’s indications that it will only agree to a renewal if limits on its own shipments are relaxed.
Russian authorities claim that although the West hasn’t specifically targeted their country’s agricultural exports, sanctions on their payments, transportation, and insurance industries have made it more difficult for them to export their own grains and fertilizers.
Rebeca Grynspan, a trade representative for the UN, and Martin Griffiths, the head of humanitarian assistance, came at the U.N. European offices in Geneva on Monday morning without saying anything.
The talks, according to two sources participating in them, were initially intended to last just one day but might be prolonged if necessary.
Wheat and corn prices dropped as a result of news of the negotiations. These grains are widely exported from Ukraine.
As negotiations to prolong the safe shipping agreement for Ukraine’s exports get underway, the prices for wheat and corn are declining, according to Matt Ammermann, StoneX’s commodity risk manager.
“Being a major exporter of wheat and grain, Ukraine’s supplies are essential to global markets.”
At 11:52 GMT, maize futures Cv1 had declined 1% to $6.11-1/4 a bushel, while wheat prices on the Chicago Board of Trade Wv1 were down 0.9% at $6.73-3/4 a bushel.
With the deadline just a few days away, I believe there are expectations in the grain markets that the deal will be extended.
Russia and Ukraine won’t likely receive everything they want, but importing nations will have lobbied behind the scenes to extend the shipping arrangement, in my opinion.
The majority of the grain transported through the corridor is exported to China.