Market News & Headlines >> Concerns About Black Sea Grain Deal Rise

Concerns about the future of the Black Sea export agreement that allows Ukraine to export grains, oilseeds and other agricultural products through three of its Black Sea ports are on the rise in the grain markets, with Russia again expressing doubts about the agreement and slowing inspections of vessels moving to and from Ukraine.

Russia on Monday said it would be “inappropriate to extend the grain deal unless sanctions affecting its agricultural exports are lifted and other issues are resolved.  The grain deal brokered by the United Nations and Turkey was initially signed by Russia and Ukraine last July and was extended by another 120 days in November. The deal is up for renewal again on March 19. Russia did raise these same concerns back in November before eventually agreeing to extend the export deal. 

Meanwhile, Ukraine's agriculture ministry on Friday said it had proposed increasing the minimum tonnage of ships that carry grain and vegetable oil from the country through the Black Sea export corridor, as it aims to boost exports despite opposition from Russia.

Ukraine has repeatedly accused Russia of delaying inspections of ships carrying Ukrainian agricultural goods, leading to reduced shipments and losses for traders. Russia has denied the accusations.

Ukraine's agricultural ministry said in a statement that due to the slowdown in inspections in the Bosphorus a queue of 108 vessels formed on Feb. 9. It said that to "reduce downtime and increase exports" the minimum tonnage of vessels could be increased to 25,000 metric tons from 20,000 tons for grains and to 10,000 tons from 6,000 tons for vegetable oils.

The ag ministry added that it would propose introducing the new rules for vessels that were not yet waiting in line.