Ukraine says grain deal will be extended for 120 days

A United Nations-brokered deal allowing exports of Ukrainian grain from the Black Sea is set to be extended for 120 days, according to Ukraine, easing pressure on global food prices.

Infrastructure Minister Oleksandr Kubrakov said on Facebook the decision was just made in Istanbul, where talks have been held. The UN welcomed the “agreement by all parties” and Turkish President Recep Tayyip Erdogan confirmed the renewal.

There was no immediate comment from Moscow, and Russian news agency Tass said talks were continuing.

Chicago wheat futures fell more than 2% as the deal facilitates exports from a major food-growing region. Corn and soybean oil also retreated.

Ukraine still wants the deal extended by a whole year, and with one more port added to the accord, Kubrakov said. He said they are still waiting for a response. President Volodymyr Zelenskiy also said that Russian exports of ammonia through its territory — a condition that Moscow has pressed for — could only be allowed if the Kremlin agrees to exchange all war prisoners.

The original pact, struck in late July, revived seaborne exports from Ukraine after Russia blockaded the country’s ports following its invasion. It was brokered by Turkey and the UN with Ukraine and Russia and signed for an initial 120 days, which are due to run out Saturday. The deal provides for an automatic extension for the same duration unless one of the parties decides to pull out or modify it.

Ukraine — a major exporter to the world — has shipped more than 11 million tons of crops through the Black Sea since the deal came into force, led by corn and wheat cargoes. The grain has headed across Asia, Europe and Africa, including some cargoes chartered by the World Food Programme.

Last month, Russia briefly suspended its participation, but after the UN, Turkey and Ukraine vowed to continue anyway, started observing it again.

President Vladimir Putin had complained that the deal didn’t do enough to ease exports of Russian grains and fertilizer, even though they aren’t subject to sanctions and shipment volumes rose.

The UN said it is “fully committed to removing the remaining obstacles to exporting food and fertilizers from the Russian Federation.” – BLOOMBERG

Dayang Norazhar

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