Russia and Ukraine to sign agreement guaranteeing safe passage for agricultural products

By Geoffrey Smith

Investing.com — Russia will sign an agreement with Ukraine on Friday guaranteeing safe passage for exports of grain and other agricultural products from ports in the war-torn country.

Kremlin spokesman Dmitry Peskov told reporters that Defense Minister Sergei Shoigu will sign the agreement, brokered by the United Nations and the Turkish government, in Istanbul on Friday. Ukrainian media have already reported earlier today that representatives of his government intend to sign.

The deal brings much-needed relief to global grain markets, which have suffered this year from disruptions to Black Sea exports following Russia’s invasion of Ukraine in February. The two countries accounted for nearly a third of all global wheat exports last year, according to UN data, and much of those exports are destined for poor countries in Asia and South Africa. North with precarious food balances.

As part of the agreement, Russia undertakes not to attack ships carrying grain or other agricultural products leaving or entering Ukrainian ports, and to allow such ships to be escorted through the approaches mined from these ports. Ukraine has in turn agreed to allow Turkish authorities to inspect vessels arriving in Ukraine as they pass through the Bosphorus Strait, thereby ensuring that they are not used to smuggle weapons into the area of war. Nevertheless, arms shipments from the West regularly enter Ukraine through its land border with European Union countries.

While the deal is a victory for diplomacy, analysts said its success in easing tensions in global food markets will crucially depend on Russia sticking to the spirit of the pact. In previous months, Russia has attacked Ukraine’s grain export terminals with long-range artillery, forcing their operators to suspend exports at least temporarily.

“President Putin has said that in the context of the looming food crisis, it is very important to unblock supply routes to world markets – fertilizers, food and grain,” Peskov was quoted as saying by news agencies. Russian press.

Sky News quoted US State Department spokesman Ned Price as saying the Biden administration would focus on holding Moscow accountable for carrying out the deal.

Wheat futures on the Chicago Mercantile Exchange were down 3% on Friday in response to the news. They have fallen 6% in the past two days as the deal nears completion.

UN officials estimate the center will take three to four weeks to set up. This means that grain may not start flowing again at full speed until the second half of August.

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