UN begins talks with russia on extending Ukraine grain shipping deal

Negotiations between official representatives of the United Nations and russia's deputy foreign minister, sergey vershinin, began on Monday, March 13, in Geneva. The parties discuss the possible extension of the agreement, which will allow the safe export of grain from Ukraine's Black Sea ports, according to the russian diplomatic mission in Geneva.

Reuters reports that UN trade representative Rebecca Greenspan and aid chief Martin Griffiths arrived without comment at the UN's European headquarters in Geneva on the morning of March 13.

Two officials involved in the talks told Reuters that the words were initially planned to last just one day. At the same time, they can be extended if necessary.

As the agency notes, the news about the negotiations led to a drop in wheat and corn prices. Ukraine is a significant exporter of both types of grain, they emphasized.

So, wheat prices on the Chicago Mercantile Exchange fell 0.9% to $6.73-3/4 a bushel, while corn futures fell 1% to $6.11-1/4 a bushel.

"I think there are expectations in grain markets that the agreement will be extended with the deadline now only a few days away," said StoneX Group commodity risk manager Matt Ammermann, quoted by Reuters.

He added that russia and Ukraine probably wouldn't get everything they wanted. But, according to the expert, the importing countries are "lobbying behind the scenes to get the shipping agreement extended." The agency emphasized that China is the largest recipient of grain transported through this corridor.

According to the agency, Moscow has already signaled that it will agree to extend the agreement only if the restrictions on its exports are lifted.

At the same time, many diplomats and senior officials, including Turkish Defense Minister Hulusi Akar, are optimistic about the possibility of renewing the agreement.

russian officials say that while the West has not directly restricted the country's agricultural exports, sanctions on the payment, logistics, and insurance industries have created a barrier to the ability to export grain and fertilizer.

Background 

Ukraine is a major global producer and exporter of grain, but a full-scale russian invasion hit its exports in 2022.

The Black Sea Grains Initiative, brokered by the UN and Turkey last July, was extended in November but will expire on March 18 unless an extension is agreed upon.

Grain exports from Ukraine fell by 26.6% to 32.9 million tons in the 2022/23 season as of March 6 due to a smaller harvest and logistical difficulties caused by russia's invasion.