Ukraine grain export deal resumes days after Russia breaks off

By Ali Kucukgocmen and Pavel Polityuk

ANKARA/KYIV (Reuters) – Russia said on Wednesday it would resume its participation in a deal freeing up grain exports from Ukraine, reversing a move that world leaders warned would increase hunger globally.

Russia, whose forces invaded Ukraine on Feb. 24, announced the reversal after Turkey and the United Nations helped keep Ukrainian grain flowing for several days without a Russian role in inspections.

The defence ministry justified the change by saying it had received guarantees from Ukraine that it would not to use the Black Sea grain corridor for military operations against Russia. Kyiv did not immediately comment on that, but has denied in the past using the shipping corridor as cover for attacks.

“The Russian Federation considers that the guarantees received at the moment appear sufficient, and resumes the implementation of the agreement,” a defence ministry statement said.

The grain deal, originally reached three months ago, had alleviated a global food crisis by lifting a de facto Russian blockade on Ukraine, one of the world’s biggest grain suppliers. The prospect of it collapsing this week revived fears of the food crisis worsening and prices rising.

The prices of wheat, soybeans, corn and rapeseed fell sharply on global markets after Russia’s announcement, which allayed concerns about the growing unaffordability of food.

Insurance companies had paused issuing new contracts, raising the prospect that shipments could stop within days, industry sources said. But Lloyds (LON:) of London insurer Ascot said that after Wednesday’s announcement it had resumed writing cover for new shipments.

SHAKY

Andrey Sizov, head of the Russia-focused Sovecon agriculture consultancy, said Moscow’s decision was “quite an unexpected turnaround” but the deal remained shaky given uncertainty about whether it would be extended past its Nov. 19 expiry.

A European diplomat briefed on the grain talks said that Russian President Vladimir Putin was likely to use the need for an extension as a way to gain leverage and dominate the Nov. 13-16 G20 summit in Indonesia.

Ukrainian President Volodymyr Zelenskiy credited Turkey and the United Nations for making it possible for ships to continue moving out of Ukrainian ports with cargoes after Russia suspended participation on Saturday.

In an interview with Turkish broadcaster ATV, Turkish President Tayyip Erdogan said he and Zelenskiy discussed sending grain to African countries. Putin had earlier proposed sending grain to countries such as Djibouti, Somalia and Sudan first, where it is badly needed.

Erdogan told Zelenskiy in a phone call on Wednesday that diplomatic efforts should be increased to end the war with a just solution, his communications directorate said.

The July 22 grains deal aimed to help avert famine in poorer countries by injecting more wheat, sunflower oil and fertilizer into world markets.

Russia suspended its involvement in the deal saying it could not guarantee safety for civilian ships crossing the Black Sea after an attack on its fleet. Ukraine and Western countries called that a false pretext for “blackmail”, using threats to the global food supply.

KHERSON COUNTER-OFFENSIVE

Eight months into the war, Ukrainian forces have wrested back territory in the east and south, and Moscow has sought to slow their momentum with stepped up missile and drone strikes targeting the energy grid.

On Wednesday, authorities in the capital Kyiv region began emergency shutdowns of the power-generating system after a spike in consumption, the regional administration said.

The move was necessary to “avoid major accidents with power equipment”, a statement said, after Russian attacks badly damaged the grid in and around the capital.

Russia has said it targeted infrastructure as part of what it calls its “special military operation” to degrade the Ukrainian military and remove what it says is a potential threat against its own security.

As a result, Ukrainian civilians have endured power cuts and reduced water supplies across the country in recent weeks. Moscow denies deliberately targeting civilians, though the conflict has killed thousands, displaced millions and left some Ukrainian cities in ruins.

In southern Kherson region, where Ukrainian forces are proceeding slowly with a counter-offensive against Russian occupying forces, Russian-installed authorities proceeded with a drive to persuade residents to evacuate, a Wednesday night statement on Facebook (NASDAQ:) by the Ukrainian military said.

Residents who had collaborated with occupying forces were leaving and some departing medical staff had taken equipment from hospitals, the statement said.

Residents of the town of Nova Zburivka in Kherson region had been given three days to leave and told that evacuation would be obligatory from Nov. 5.

Reuters was not able to verify the battlefield reports.

Meanwhile, in Washington on Wednesday the United States said it had information that indicated North Korea is covertly supplying Russia with a “significant” number of artillery shells for its war in Ukraine.

White House national security spokesperson John Kirby (NYSE:) did not provide evidence but he told a virtual briefing that North Korea was attempting to obscure the shipments by funnelling them through countries in the Middle East and North Africa.

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