UN officials confirmed Thursday, November 17th, that all parties in the Ukraine grain export deal have agreed to an automatic 120-day extension of the agreement, Reuters reports. The deal, brokered by the UN and Turkey, is meant to stave off acute food shortages triggered by the war.
The agreement was originally signed in late July and was due to expire on November 18th. Ukraine and Russia are major global grain exporters, with Russia being the world’s largest wheat exporter and a major supporter of fertilizers.
In response to the news, grain prices dropped. Benchmark wheat futures traded in Chicago declined 2% while corn dropped 1%.
The 120-day extension of the critical agreement falls short of the one year sought by the UN and Ukraine.
“I welcome the agreement by all parties to continue the Black Sea grain initiative to facilitate the safe navigation of export of grain, foodstuffs, and fertilizers from Ukraine,” UN Secretary-General Antonio Guterres said in a statement. He added that he was deeply moved by the level of cooperation shown by the parties, and grateful that an agreement had been reached.
The UN chief also expressed his deep commitment to remove the “remaining obstacles to the unimpeded exports of Russian food and fertilizers,” as these remain “essential” to avoid a food crisis next year.
As stipulated in a UN-Russia memorandum signed in July this year, the international organization is committed to removing restrictions on the export of Russian agricultural products and fertilizers to global markets.
Two sources told Reuters that the export of Russian ammonia (an important ingredient in fertilizers) via a pipeline to the Black Sea had also been discussed, but that an agreement had not yet been reached.
Back in September, Ukrainian president Volodomyr Zelensky said he would be open to resuming ammonia exports through Ukraine on the condition that Moscow returned prisoners of war, which Russia rejected.
Guterres went on to thank Turkey for its critical role. He said that Istanbul has become an “essential center for discreet diplomacy to solve dramatic problems.” Turkey oversees the inspections of vessels to prevent weapons smuggling and provocations while hosting the Joint Coordination Center (JCC) in Istanbul.
JCC officials reported that, since exports began in early August, a total of 470 inbound and 471 outbound voyages have been enabled. As of November 17, nearly 11.2 million metric tons of grain and foodstuffs have been exported from the three Ukrainian ports.
In a tweet, Turkish President Recep Tayyip Erdoğan said that “the significance and benefits of this agreement for the food supply and security of the world have become evident.”
Meanwhile, Ukrainian President Volodymyr Zelensky tweeted that his country would “remain the guarantor of global food security.”
The possibility of a technical extension for another 120 days without any changes and additions had been included in the original agreement text, provided there were no objections from any of the parties—Russia, Turkey, or Ukraine. Yet, as previously reported by The European Conservative, even that outcome was in doubt only about a week ago.
Russia had been keen on amending the agreement before it would renew its commitment, stating that it sought the lifting of restrictions on its exports of agricultural products and that its state-owned bank Rosselkhozbank be readmitted to the SWIFT international payment system. When the next extension requires its approval, it is expected that Russia will bring up these demands once more.
In a November 17th interview, Russia’s Deputy Foreign Minister Sergey Vershinin said that Russia’s continued participation in the deal “depends on the bona fide fulfillment” of it, including “the non-use of the respective humanitarian sea-transit corridor for military purposes,” (an oblique reference to the Ukrainian drone attack on the Russian port of Sevastopol of late October) and “the achievement of an effective outcome for Russia’s agricultural exports in accordance with the Russia-UN Memorandum.”