Port of Odessa/Dumskaya
The United Nations says they have made significant progress on grain exports from blocked Ukrainian ports.
UN Secretary-General António Guterres informed the G7 leaders that his negotiations to lift the blockade from the Ukrainian ports on the Black Sea, the “moment of truth” has been reached.
Guterres told the G7 leaders that the UN teams are in separate negotiations with Russia and Ukraine to ensure the flow of grain and fertilizer to the market from both sides.
He said there was a conditional agreement under which Ukrainian grain would leave three Ukrainian ports, including Odessa. All this will happen with the consent of Russia without the need to clear ports, which was previously considered necessary. The ships will then sail across the Black Sea towards Turkey behind certain safe lanes, and the operation will be supervised together with Ukraine, Russia, Turkey and the UN.The UN Secretary General says Ukraine has accepted Russia's demand that grain ships in Turkish waters be checked for weapons before they arrive in Ukrainian ports.
Separate discussions with Russia focused on the EU providing guarantees, that sanctions and insurance will not be imposed against Russian grain exports.
Ukrainian ports are blocked and prices rise
It is generally accepted that the restoration of sea routes is critical, and alternative transportation by rail through Poland or to Romanian ports cannot reach the normal volumes of 5 million tons of Ukrainian grain exports per month.
Ukraine stores 25 million tons of corn, sunflower oil, wheat and other agricultural products. In the first 22 days of June, Ukraine exported only 1.11 million tons of grain, which is 44% less than in the same period in 2021.
At the same time, since the beginning of 2022, wheat prices have jumped by more than 35% . This was largely the result of the geopolitical situation in the world. One of the key challenges is Russia's attack on Ukraine. As a result, the export of Ukrainian raw materials to the world market has fallen significantly.
Another agricultural asset, the price of which also showed a significant increase this year, was corn. Since the beginning of 2022, quotations for this type of grain have increased by 25%. In May 2022, Ukraine exported about 1 million tons of corn. The situation in Ukraine had a serious negative effect on the world corn market, reducing exports from the country and provoking an increase in prices for this product – just like for wheat.
