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Grain export deal via Black Sea extended

22-11-2022 | |
6 countries have coastlines on the Black Sea (clockwise), Ukraine, Russia, Georgia, Turkey (Türkiye), Bulgaria, and Romania. Photo: Canva
6 countries have coastlines on the Black Sea (clockwise), Ukraine, Russia, Georgia, Turkey (Türkiye), Bulgaria, and Romania. Photo: Canva

The grain deal, which guarantees safe export of Ukrainian grain through the Black Sea, has been extended by 120 days. Russia and Ukraine have reached an agreement to this end together with the United Nations (UN) and Turkey.

The extension of the grain agreement is very positive for the world’s food supply, say the parties involved. Russia had already indicated this week that it agreed in principle to an extension. Turkish President Erdogan also counted on it. After consultations in Istanbul, it has become clear that all parties agree on the extension.

Grain deal is a big boost for export

Ukraine’s grain exports depend mainly on shipments through Black Sea ports. Because of the war, this export came to a complete standstill. The agreement that was concluded in July has given a significant boost to grain exports from Ukraine in recent months. However, exports are far from returning to pre-war levels.

Ukrainian grain exports more than 30% smaller

Figures from the Ukrainian Ministry of Agriculture show that since July 1, grain exports are 30.8% lower than in the same period last year. Between July 1 and mid-November, Ukraine exported a total of 15.6 million tons of grain. In the same period last year, this was 22.5 million tons.

Rye and barley

In percentage terms, the export of rye and barley in particular is smaller. In terms of tonnes, however, it is mainly wheat that is exported less. So far, 6 million tons of wheat have been exported, less than half the amount shipped last year.

Corn exports bigger

Maize exports, on the other hand, are more than twice as large as a year ago. That is because a lot of maize from the old harvest still had to be exported to make room in the silos for the new harvest. A large part of this maize was delivered to Spain because the harvest there is much smaller this year due to drought. Of the 8.3 million tons of maize exported by Ukraine since July 1, 4.4 million tons went to the European Union.

Barrier to Ukraine exports

The latest figures clearly show that the war continues to seriously hamper Ukrainian exports. In the first half of November, exports are still about 22% smaller than the 3 million tonnes exported in the same period last year. In November, 1.2 million tons of corn have now left. Last year that was more than 1.6 million tonnes in the same period. So that saves a quarter.

Major role for ports

The ports play a major role in Ukraine’s grain exports. Before the war, 90% of exports went through the ports. Because of the war, this export came to a complete standstill. Since the grain deal at the end of July, a number of ports have reopened for export via the Black Sea.

The export figures show that this is very important for Ukrainian exports. Of the approximately 7.5 million tons of maize exported in the months July to October, more than 5 million tons were shipped via the ports. The railways contributed about 2 million tons to the export. In addition, slightly more than 500,000 tonnes were transported abroad by lorries.

From July 1 to October 31, almost 4.4 million tons of wheat left the country through the ports. 490,000 tons were shipped in train wagons and 340,000 tons by truck.

Ramaker
John Ramaker Commodities market editor, Boerderij