Ukraine’s grain deal extended at the last minute

Ukraine is a major food exporter to other parts of the world, especially when it comes to grain.

Ukraine’s grain deal extended at the last minute
Amfitriti, a bulk carrier part of the Black Sea grain deal, and other commercial vessels wait to pass the Bosphorus strait off the shores of Yenikapi in Istanbul, Turkey, May 10, 2023. Reuters/Mehmet Emin Caliskan/File Photo

The backstory: Ukraine is a major food exporter to other parts of the world, especially when it comes to grain. So, when Russia invaded the country last year, there was a lot of worry about global food security, with food prices soaring after Ukraine paused food shipments in February. In fact, even when Ukraine was able to ship some grain via land routes in Europe, the majority of it was getting backed up and sitting in silos across the country with no good way to send all of it out.

In July, the Black Sea Grain Initiative was brokered by Turkey and the UN so that Ukraine could continue to safely ship grain via the Black Sea without a threat from Russia. The deal was supposed to last 120 days and was automatically renewed in November for another 120. Because of the deal, Ukraine has been able to safely export over 30 million metric tons of grain.

More recently: In March, the grain deal was supposed to renew again, but Russia wanted to make some changes. So it was renewed only for another 60 days instead of the 120 in the agreement. Now the deal is set to expire again on May 18. Here’s what Russia wants from the UN in return for keeping the grain deal going:

  • Getting the Russian Agricultural Bank back on the SWIFT payment system
  • Resuming sending supplies to Russia of agricultural machinery and spare parts
  • Lifting restrictions on insurance and access for Russian ships and cargo
  • Renewing an ammonia pipeline from Russia to Odesa in Ukraine
  • Unblocking finances of Russian fertilizer companies.

Although the pact has been in place, Ukraine has accused Russia of purposefully slowing down exports. Apparently, no inbound ships have been cleared since early May.

The development: On Wednesday, one of the last ships carrying grain under the deal left Ukraine for Turkey. But talks in Turkey continued, and the grain deal extension went through. It was touch and go for a minute, with the deal’s expiration so close. Now, it’s been extended for another 60 days. It’s not clear if any major concessions were made to Russia just yet. Talks will also continue to figure out the best ways to continue the deal and negotiate with both sides.

Key comments:

"There are still a lot of open questions regarding our part of the deal. Now a decision will have to be taken," Kremlin spokesman Dmitry Peskov told reporters on Tuesday.

“If you have a cancellation of the grain deal again, when we’re already at a pretty tight situation, it’s just one more thing that the world doesn’t need, so the prices could start heading higher,” said William Osnato, a senior research analyst at agriculture data and analytics firm Gro Intelligence. “You don’t see relief on the horizon.”

“I want to give a good news,” Turkish President Recep Tayyip Erdogan said on Wednesday.  “With the efforts of our country, the support of our Russian friends and the contribution of our Ukrainian friends, the Black Sea Grain Initiative has been extended by another two months.”