By Janet Ekstract
ISTANBUL- The Black Sea Grain Deal brokered by the U.N. alongside Turkiye, Ukraine and Russia, is set to expire on Monday July 17, and could put grain shipments from Ukraine in jeopardy if Russia refuses to renew the agreement. A global food crisis was previously averted by the extension of the deal but the one constant has been Russia’s continual threats of reneging on the deal. On Friday, Turkish President Recep Tayyip Erdogan speaking to reporters – expressed his hope that the deal will be extended and spoke about a letter from U.N. Secretary-General Antonio Guterres referring to the extension. As Erdogan further commented: “U.N. Secretary-General Antonio Guterres sent a letter to Putin. I hope that with this letter, we assure the extension of the grain corridor deal with the joint efforts of us and Russia.” Erdogan added that he will be hosting Russia’s President Putin in August, saying “We are of the same mind on the extension of the Black Sea grain corridor.”
Meanwhile, China is being urged to encourage Russia to renew the deal. As Germany’s Ambassor to Beijing Patricia Flor recently told the press: “We appeal to China to support the extension of the deal and talk to Russia. China, which is also a food importer and recipient of Ukrainian grain, can contribute to stabilize the global food market.” Under the Black Sea Grain Initiative, China has been a major destination for grain shipments from Ukraine. Flor added: “Russia’s refusal to renew the Black Sea Grain Initiative will result in a blow to the global food market, lead to rising prices and further aggravate the global food crisis.” The CEO of Agroprosperis Group which is a major crop producer and exporter in the Black Sea region Igor Osmachko also called on China to push for an extension on the deal. As Osmachko told the press: “We hope the Chinese government will lobby for prolongation of the grain initiative to continue exports of Ukrainian crops to China and prevent food inflation in China and the world.”
Analysts on China say the deal is crucial for China since it imports a majority of its corn from Ukraine which is an important food for Chinese citizens since it’s used for cooking oil and animal feed – other sources of corn China could import, would be more expensive. Another reason purchasing corn from Ukraine is practical for China, Chinese agribusiness consultants say, is due to Ukraine’s modern infrastructure developed through state-owned food giant COFCO over the last decade. But the major issue is to have additional ports if the deal faces delays. As Osmachko said: “Also we are asking to certify Ukrainian exports to China through the Constanta Port [in Romania]. This certification will add an additional export route in case the grain initiative is delayed.” Osmachko added that no inbound ships have been inspected since June 28 and no ships were going to China, if they were, he said they were blocked at the Bosphorus Strait.
Director General of the Ukrainian Agribusiness Club Roman Slaston who spoke to the press explained: “Millions of tons of grain may be spoiled in silos if we do not have the possibility of sea exports in sufficient volumes.” He added that with the expiration date of the grain deal looming, ships arriving to export grain from Ukraine are almost non-existent. According to Slaston, there is an additional 3-5 million tons of grain ready for export from previous harvests while there will be at least 40 million tons of grain and oilseed ready for export with the new harvest this year. The Black Sea Grain Initiative is scheduled to be extended 120 days at a time but in March and May, Russia only agreed to two months as a ploy to pressure the West to ease up on sanctions. On Thursday, Russia’s President Putin threatened to withdraw from the deal unless more food and fertilizer could be exported from Russia. European Commission President Ursula von der Leyen made it clear that if Russia fails to agree to extend the deal that “Otherwise, global food insecurity will be the consequence. So now the ball is in President Putin’s court, and the world is watching.” She has urged Russia to extend the deal to which Putin has said the U.N. has yet to provide an amenable solution.