Russia, Ukraine to Sign Deal Guaranteeing Safe Passage for Agricultural Products
2022.07.22 17:54
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 the war-torn country’s ports.
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 in the day that its government representatives intended to sign.
The deal gives much-needed relief to world grain markets, which have suffered this year from disruptions to exports from the Black Sea, following Russia’s invasion of Ukraine in February. The two countries accounted for nearly one-third of all global wheat exports last year, according to UN data, and much of those exports go to poor countries in Asia and North Africa with precarious food balances.
Under the deal, Russia will agree not to attack any ships carrying grain or other agricultural products leaving or entering Ukraine’s ports, and to allow such ships to be escorted through the mined approaches to those ports. Ukraine in turn has agreed to allow Turkish officials to inspect ships coming to Ukraine as they pass through the Bosporus straits, thus ensuring that they are not used to smuggle weapons into the war zone. Arms shipments from the West, nonetheless, routinely enter Ukraine through its land border with European Union countries.
While the deal is a victory for diplomacy, analysts have said that its success in easing tensions in world food markets will depend crucially on whether Russia observes the pact’s spirit. 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 against the backdrop of the food crisis that is looming, it is very important to unblock the supply routes to world markets — fertilizers, food and grain,” Peskov was quoted by Russian newswires as saying.
Sky News quoted U.S. State Department spokesperson Ned Price said the Biden administration would focus on holding Moscow accountable for carrying out the agreement.
Wheat Futures on the Chicago Mercantile Exchange were 3% lower on Friday in response to the news. They’ve fallen 6% in the last couple of days as the deal has edged nearer to completion.
UN officials believe that the center will take three to four weeks to be set up. This means that grain might not start flowing at full speed again until the second half of August.
