Ukraine and Russia grain deal extended: Term unclear

21-03 | |
Ukraine and Russia grain deal extended: Term unclear

After lengthy negotiations, Russia and Ukraine, along with Turkey and the United Nations, have struck another grain deal. The mediator between the 2 countries, Turkish President Erdogan, has announced.

Duration of deal is a sticking point

According to the Ukrainian Minister for Infrastructure Oleksandr Kubrakov, this will apply for a period of 120 days. However, the Russian Ministry of Foreign Affairs is talking about just 60 days.

Talks about a new deal have been very difficult in recent weeks and the current agreements expire on March 18. The duration of a new deal being one of the sticking points.

Export Ukrainian and Russian grain via Black Sea

The grain deal allows Kiev and Moscow to export grain, manure and other agricultural products via the Black Sea despite the war. Both countries are major global grain suppliers.

If it were indeed about a 120-day extension, it would be a victory for Ukraine. Russia previously said it would prefer to close a deal for only 60 days. On Tuesday, March 14, Moscow already communicated that a deal had been reached for 60 days. That message later turned out to be incorrect.

The original agreement dates from July 2022. Under that agreement, more than 800 ships have so far transported 25 million tons of grain, Erdogan said. This is the second time the countries have extended the grain deal.

Grain prices futures markets down

Grain prices immediately fell in the futures markets after the deal was announced. Bloomberg does note that a period of 60 days ends just before the harvest of winter wheat in Ukraine. That gives Russia a strong negotiating position at that time, because the world then needs the grain. Bloomberg also reports that the sowing of summer cereals in Ukraine has started earlier than last year, but will also be sown 30% less.

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