Just days before the Black Sea Grain Initiative (BSGI) allowing food exports from Ukraine’s Black Sea ports is due to be renewed on 18 March, Russia has agreed to an extension, but only for 60 days, Politico reported on 13 March.
The BSGI - brokered by the United Nations and Turkey - had been operating on a 120-day cycle and was signed last July and extended in November.
In a statement issued on 13 March by the Russian mission to Geneva after talks with UN officials, Deputy Foreign Minister Sergey Vershinin said Russia “does not object to the next extension of the Black Sea Initiative after the expiry of the second term on 18 March, but only for 60 days.”
Vershinin said Russia’s agreement was dependent on concrete measures to facilitate Russian agricultural exports.
Under a second deal struck with Moscow in July 2022, the UN agreed to help facilitate Russian food and fertiliser exports for a three-year period, Politico wrote. Moscow maintains that Western sanctions targeting fertiliser oligarchs and its main agricultural bank have hampered these exports and this side of the bargin has not been kept, according to the Politico report.
"Our further stance will be determined upon tangible progress on normalisation of our agricultural exports, not in words, but in deeds," Reuters reported Vershinin as saying.
Russian demands extended to “our agricultural exports, including bank payments, transport logistics, insurance, ‘unfreezing’ of financial activities and the supply of ammonia through the Togliatti-Odessa pipeline,” AgriCensus quoted Vershinin as saying.
In response, Ukraine’s infrastructure minister Oleksandr Kubrakov said that as the grain deal involved at least 120 days of extension, Russia’s position to extend the deal by only 60 days contradicted the documents signed by Turkey and the UN.
For this reason, Ukraine would wait and see the official position taken by the agreement’s partners, as the guarantors of the initiative.
The stance taken by Russia received a mixed response from traders, with some saying that they saw it as a bid to gain additional leverage before agreeing the final extension, while others said that a 60-day extension was better than no extension at all, AgriCensus wrote.
A 60-day extension would effectively only allow spot trading as forward planning for shipments would become even more difficult, the report said.
A further complication was the fact that ships arriving at Istanbul for inspections have been delayed by 25 days on average, with some vessels waiting up to 50 days – a delay that would be fundamentally incompatible with a 60-day agreement, AgriCensus added.
Around 24M tonnes of Ukrainian produce have been transported under the grain deal to date, according to the Politico report.
