Ukraine grain deal re-signed
A deal allowing grain exports from Ukraine has been extended on the day it was due to expire. Here’s what you need to know.
A wartime deal allowing grain exports from Ukraine has been extended on the day it was due to expire.
The United Nations and Türkiye announced the extension of the Black Sea Grain Initiative on Saturday, but neither said how long the agreement would last.
The deal will allow the safe transport of grain ships through the Black Sea to countries in Africa, the Middle East and Asia, where the UN has warned grain shortages could lead to famine.
In a statement before the extension was announced, Ukraine president Volodymyr Zelensky said the deal was necessary to “reduce global food prices and provide support to developing countries”.
Global grain prices spiked last year when Russia’s invasion of Ukraine ground trade through the Black Sea to a halt, but eased again following the signing of the agreement in July.
Under the deal, merchant ships from the Ukrainian ports of Odessa, Chornomorsk, and Yuzhne are allowed to pass through specially-designed shipping corridors on the condition they stop for inspection in Türkiye.
Grain prices over the past 12 months have seesawed in response to threats to the deal. Russia’s bombing of the port of Odessa the day after the deal was first signed sent grain prices briefly higher, with traders anxious the bombing would tank the agreement.
In October, Russian threats to withdraw from the deal sent prices into a new period of volatility, before it was extended on November 17 for four months.
The deal was due to expire on Saturday, before it received a last minute extension.
Australian wheat prices have remained high since Russia’s invasion of Ukraine, compared to historical averages, but have been largely buffered against the volatility of global grain prices. Australian Premium White wheat delivered to Melbourne last week sold for $425/ tonne, slightly down from the price of $430/tonne at the same time last year.
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