Ukraine’s president and the UN secretary general have called for a vital deal allowing Russian and Ukrainian wheat and fertilisers to be exported through the Black Sea to be extended, amid reports that Moscow does not intend to renew its participation.
Ukraine and Russia signed the UN-backed deal for an initial 120 days last July, allowing the export of millions of tonnes of grain from blockaded Black Sea ports, an agreement that was seen as averting the threat of a global food crisis.
A subsequent November extension to the Black Sea grain initiative for a further four months is scheduled to expire on 18 March, unless it is extended.
Volodymyr Zelenskiy and António Guterres said on Wednesday they backed the renewal of the deal, but Russia has already signalled it is unhappy with aspects of the agreement, prompting grain traders to warn of potential risks to supplies, and the impact on global grain prices.
Guterres said the initiative had enabled the export of 23m tonnes of grain from Ukrainian ports to date. “It contributed to lowering the global cost of food and has offered critical relief to people, who are also paying a high price for this war, particularly in the developing world,” he said, adding that he wanted to “underscore the critical importance of the rollover”.
Before the war, exports from Russia and Ukraine accounted for about 30% of the global wheat trade.
Prior to the conflict, between 5m and 6m tonnes of grain were exported each month from Ukraine’s seaports, according to the International Grains Council (IGC), an intergovernmental body that seeks to promote cooperation in the global grain trade.
The volume carried by ships through the grain corridor gained momentum towards the end of 2022, according to Arnaud Petit, executive director of the IGC. “It was a really impressive level of export. In November and December, Ukraine was close to the same level as before the war in terms of exports by sea plus inland,” he said. “Approximately 5m tonnes of grain was exported, close to usual exporting capacity.”
As well as the shipments, some exports travelled overland by road and rail, as well as through Danube ports, through the EU’s “solidarity lane” scheme.
However, Petit said exports had slightly reduced in January and February, amid poor weather in the region and power outages in Ukraine affecting port facilities, combined with some delays to grain inspections, which take place when the vessels reach Turkey.
The overall success of the shipments of much-needed wheat, maize, oil seeds and barley from the Black Sea since August to countries reliant on grain imports has reduced the global wheat price by about 30% since its June peak.
Grain traders are concerned about the impact on global food prices if the agreement is not renewed, and what it would mean for Ukraine’s summer wheat harvest.
Shipping industry representatives have praised the smooth functioning of the grain corridor over the past seven months, but said that any end to the agreement would almost immediately stop vessels travelling to the Black Sea.
“In terms of shipping it has worked,” said Guy Platten, the secretary general of the International Chamber of Shipping. “It has been a huge success. I can’t recall any adverse incidents with ships since it started. The crews have been safe, so that’s a testament to how successful and how well-thought out it has been by the parties. On a political and a technical level it works.”
However, Platten and other industry representatives said a failure to extend the agreement would create concern at shipping companies, who would not want to endanger their vessels and crew, and would struggle to obtain insurance. “Our fear is that it doesn’t get renewed and the whole initiative grinds to a halt until such time as it can be renegotiated,” he said. “I think the impact would be quite swift if it wasn’t extended.”
The International Chamber of Shipping, the International Maritime Organisation and about 30 other industry groups are also calling on the UN to help free the 60 ships stuck at Ukrainian ports since the start of the conflict. These vessels are not suitable for transporting grain, or cannot be adapted, and have therefore not been able to leave the country through the shipping corridor.
