Thursday, March 30, 2023

Turkey provides corridor for grain exports from Ukraine

Estimated reading time: 2 minutes

Hopes are growing over plans to unlock grain exports from Ukraine’s Black Sea ports with Turkey playing a key mediator role. News agency Reuters reported that Turkish officials expected progress when Russia’s foreign minister, Sergei Lavrov, visited both Moscow and Kyiv keen for a solution to the current impasse.

Pre-war Ukrainian exports

Prior to the war, Ukraine exported more than five million metric tons of grain every month, mostly via its Black Sea ports and mainly through Odessa. Ukraine contributes 42% of the sunflower oil traded on the global market, 16% of maize, and 9% of wheat with many countries, particularly in Africa and the Middle East being heavily dependent on Ukrainian imports.

Due to port blockades, at present much of the grain coming out of Ukraine is going westwards on rail routes into eastern Europe, with up to 760 000 metric tons in early May being recorded. But with 20 million tons needing to be exported, the rail link is seen as only a stop-gap solution.

Read more about Ukraine’s export channels here.

Russia exporting high volumes grain

The United Kingdom’s Agriculture and Horticulture Development Board (AHDB) recently said that while limited grain was leaving Ukraine, Russia continues to export high volumes of grain with competitive pricing. According to SovEcon, April saw an estimated 2,7 million tons of grain exports and a further estimated 1,5 million tons in May. Demand in recent days is understood to be weaker, said the AHDB’s senior arable analyst, Megan Hesketh, with a depleting grain export quota to consider.

UN proposes plan to re-open shipping routes

The United Nations pitched a plan to reopen shipping routes from Odessa and other Ukrainian ports, which might involve a Turkish naval escort for tankers leaving Ukraine and transiting Turkey’s straits. It is understood that for Russia to agree, it would want to see some Western sanctions targeting its insurance sector lifted.

Turkey’s stance comes at a time when Senegalese president, Macky Sall, who is also chair of the African Union, gave credibility to Russia’s pledge that it will allow safe export of Ukraine’s grain stocks. – All About Feed

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