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Negotiations to renew Black Sea Grain Initiative underway

Russia and Ukraine began negotiations Monday to extend an agreement to export grain out of the Black Sea.

Steve Nicholson, global strategist for grains and oilseeds with Rabobank, tells Brownfield there is pressure from Turkey and the United Nations for an extension. “I’m optimistic it will get renewed, but maybe in a different form.  Maybe the Russians aren’t part of that process anymore, but we need them because we need to protect the Black Sea shipping channels and continue to see those ships move through there and protected.”

The agreement will expire Saturday, March 18^th, but Nicholson says Russia has expressed some concerns. “The Russians continue to harp around the edges by saying “well, the Europeans are taking it all and it’s not going to our friends in Africa.” But, when you talk to people over there, in some ways, the wouldn’t mind if Russia dropped out, but that doesn’t protect the Black Sea Region.”

He says when Russia dropped out in October, more grain moved through Turkish straights. “The Russians are getting two or three ships a day and out the door. During the period where they were out, they were getting upwards of 25 to 30 ships out the door in a three day period.  Russia has not been helpful to the agreement in the sense of slowing it down.”

Since the initiative started on Aug. 1, about 24 million metric tons of agricultural products including corn, soybeans and wheat have been shipped from Ukraine, according to data from the United Nations.