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Supply Chain

Turkey, Russia, Ukraine, UN Set To Meet On Grain Exports

A Russian military delegation arrived in Istanbul on Wednesday to meet their Ukrainian and Turkish counterparts and UN officials for talks on resuming exports of Ukrainian grain from the Black Sea port of Odesa as a global food crisis worsens.

Turkey has been working with the United Nations to broker a deal after Russia's 24 February invasion of Ukraine sent prices soaring for grains, cooking oils, fuel and fertiliser.

Turkish Defence Minister Hulusi Akar announced the latest talks on Tuesday.

"We are working hard indeed but there is still a way to go," UN Secretary-General Antonio Guterres told reporters on Tuesday. "Many people are talking about it. We prefer to try and do it."

Ukraine and Russia are major global wheat suppliers, and Russia is also a large fertiliser exporter, while Ukraine is a significant producer of corn and sunflower oil.

Read More: Sunflower Oil Supplies Improve As EU Market Adapts To War In Ukraine

New Plans 

Diplomats say details of the plan under discussion include Ukrainian vessels guiding grain ships in and out through mined port waters; Russia agreeing to a truce while shipments move; and Turkey - supported by the United Nations - inspecting ships to allay Russian fears of weapons smuggling.

The Interfax news agency quoted Pyotr Ilyichev, head of the international organisations department at the Russian foreign ministry, as saying Russia is ready to facilitate the navigation of foreign commercial vessels to export Ukrainian grain.

He added that Russia wants to control and inspect vessels to rule out "arms smuggling".

News agency RIA quoted another diplomatic source as saying that Russia's demands include the removal of "obstacles to the exports" created by Western sanctions.

"There are obstacles for the Russian side in the areas of ship insurance, logistics, transportation services and banking operations due to the sanctions imposed," RIA's source said.

Grain Exports 

Russia has continued to export grain since the war started but there is a lack of large vessels as many owners are afraid to send them to the region. Cost of freight and insurance have also risen sharply.

Ukraine sparked hopes on Tuesday for an increase in grain exports despite Russia's blockade of Black Sea ports, noting that ships had started to pass through an important mouth of the Danube river.

Ukrainian Foreign Minister Dmytro Kuleba was quoted by Spanish newspaper El Pais as saying that Kyiv was "two steps away" from hammering out a deal with Moscow.

"The security concerns, linked to Russia's position, need to be addressed. We are in the final phase and now everything depends on Russia," he said, adding that Moscow could still drag out the talks.

Russia's invasion and sea blockade of Ukraine has stalled exports, leaving dozens of ships stranded and more than 20 million tonnes of grain stuck in silos at Odesa.

Farmers of both countries are currently harvesting the 2022 wheat crop.

July-November is usually the busiest time for traders to ship the new crop from both countries.

The coming harvest is also at risk as Ukraine is now short of storage space due to the halt in exports.

Read More: Ukraine's Grain Exports Plunge 43% In June As War Takes Its Toll

News by Reuters, edited by Donna Ahern, Checkout. For more Supply Chain stories, click here. Click subscribe to sign up for the Checkout print edition.

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