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Russia agrees to extend trade agreement with Ukraine

Russia has agreed to a 60-day extension of the Black Sea Grain Initiative with Ukraine.

StoneX Group Chief Commodities Economist Arlan Suderman says that’s half the time of the original agreement and now, Turkey and the United Nations are trying to bring consensus to the issue.

“It’s anticipated by the markets that all trade will continue until we reach the 60-day period and that’s when we’ll have to deal with the conflict unless the United Nations and Turkey can work out the details,” says Suderman. “But at least for now, it looks like trade will continue.”

For the next two months, he says Russia will continue inspecting ships at pre-approved Ukrainian ports and those inspections have been slow.

“They’ve been only inspecting roughly 2.5 to 3 boats per day, on average. To meet the volume necessary, they need to inspect many times that. Some have said maybe up to one dozen ships per day or more.”

Suderman says combined, the two countries are the breadbasket of the world and any reduction of grain coming out of the area tightens supplies and increases demand for these commodities.