Grain deal extended for two more months, Erdogan announces

Grain deal extended for two more months, Erdogan announces
Black Sea Grain Deal has been extended for a further two months / bne IntelliNews
By Dominic Culverwell in London May 18, 2023

The Black Sea Grain Deal has been extended for another 60 days, Turkish President Recep Tayyip Erdogan tweeted on May 17.

The agreement, due to expire on May 18, was in jeopardy after Russia threatened to pull out over what it perceives as unfair treatment. Moscow has long complained that while Ukraine is free to export grain under the terms of the UN-brokered agreement, Russia’s own grain exports remain impeded thanks to restrictions on shipping imposed as part of the fifth package of sanctions adopted in April last year.

“We will continue our efforts to ensure that all the conditions of the agreement are fulfilled and that it will continue in the next period,” Erdogan wrote on Twitter.

“I wish that this decision, which is of vital importance for the uninterrupted operation of global food supply chains and especially for facilitating the access to grain of the countries in need, will be beneficial to all parties,” he added.

Lengthy discussions last week between the UN, Turkey, Russia and Ukraine threatened to go nowhere, with Kyiv preparing alternative routes should the deal fail.

The agreement was signed in July for 120 days, and renewed in November and March, opening up three Ukrainian ports for agricultural exports to alleviate a global food crisis. Around 30.3mn tonnes of grain have been exported under the deal. Nevertheless, Ukraine claims its agricultural exports have been reduced by 15-18mn tonnes.

Tensions have been high and Russia briefly suspended the agreement in October after Ukraine carried out a massive drone attack on Russia’s Black Sea fleet. Days later, Russia relented and the deal was extended for another 120 days on November 17.

On April 17, Russia’s Foreign Ministry listed five conditions that must be met to extend the deal: reconnection of the Russian Agricultural Bank (Rosselkhozbank) to SWIFT; resumption of supplies of agricultural machinery and spare parts to Russia; lifting restrictions on the insurance of Russian grain ships and their access to ports; unblocking foreign assets and accounts of Russian companies associated with food production and transportation; and restoring the operation of the Togliatti-Odesa ammonia pipeline, a pipeline that runs from Russia to Europe over Ukraine’s territory and earns Moscow billions a year in export revenues.

At the same time, Kyiv accuses Russia of sabotaging the agreement by delaying vessel inspections, meaning some traders have been waiting in the Bosphorus for a month.

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