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Asharq Al-Awsat
Asharq Al-Awsat
World
Asharq Al-Awsat

Ukraine Urges UN and Türkiye to Start Talks to Extend Grain Deal

Palau flagged bulker MKK1, carrying grain under UN’s Black Sea grain initiative, is towed free after running aground in Istanbul's Bosphorus, Türkiye January 16, 2023. (Reuters)

Ukraine has sent an appeal to the UN and Türkiye to start negotiations on extending a grain export deal, but there has been no response, a Ukrainian government source said on Tuesday.

Yuriy Vaskov, Ukraine's deputy minister of restoration, told Reuters last week that Kyiv would ask all sides to start talks to roll over the deal, seeking an extension of at least one year that would include the ports of Mykolaiv.

The Black Sea Grain Initiative brokered by the UN and Türkiye last July allowed grain to be exported from three Ukrainian ports. The agreement was extended in November and will expire on March 18 unless an extension is agreed.

"We have sent a letter requesting that we start dealing with this issue as March 18 is very soon, but we have not had any feedback so far," a source said.

A major global grain grower and exporter, Ukraine's grain exports were down almost 27% at 31.8 million tons in the 2022/23 season as of Feb. 27, impacted by a smaller harvest and logistical difficulties caused by the Russian invasion.

Ukraine exports around 3 million tons of agricultural products a month under the deal, but Vaskov said Ukraine was able to export 6 million tons a month from the ports of Odesa region and boost it to 8 million tons if Mykolaiv joins.

Despite a decrease in the 2022 grain harvest to around 54 million tons from a record 86 million in 2021, at least 30 million tons of grain are still in silos and could be exported, according to the agriculture ministry.

The Black Sea is already listed as a high risk zone by the London insurance market, and additional war risk insurance premiums of tens of thousands of dollars a day are common costs now alongside fuel and freight.

The grain corridor has relied on foreign-owned ships and Western insurers to provide cover.

Insurance industry sources said having Mykolaiv added to the initiative would help to speed up the departure of over 60 ships stranded in multiple Ukrainian ports.

There are around 26 ships stuck in Mykolaiv alone, according to shipping industry estimates.

"This could significantly increase the number of ships that could get out," one industry source said.

Insurers are facing at least half a billion dollars in claims for the commercial ships still stuck in Ukraine a year after the start of the war with Russia, sources have said.

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