MOSCOW, RUSSIA — After receiving assurances that the “humanitarian corridor” created to ship grains from Ukraine to markets around the world would not be used for military purposes, Russia has re-entered the Black Sea Grain Initiative, according to Reuters. Russia had withdrawn from the agreement on Oct. 29 following alleged attacks on its ships in the region. Russia’s withdrawal from the agreement had sent global wheat futures higher.
As of 6:30 a.m. central US time, the Chicago SRW Wheat futures contract had fallen 5.65% following Russia’s statement of re-entry into the agreement.
“With the help of an international organization and Turkey, the necessary written guarantees from Ukraine on not using the humanitarian corridor and Ukrainian ports designated for the export of agricultural products for military operations against the Russian Federation were obtained and submitted to the Joint Coordination Centre (JCC) on 1 November 2022,” according to a statement released by the Russian defense ministry and translated by Reuters. “In particular, the Ukrainian side officially pledged that ‘the maritime humanitarian corridor will be used only in accordance with the provisions of the Black Sea Initiative and the related JCC regulation.’ The Russian Federation believes that the guarantees received at the moment appear sufficient and resumes implementation of the agreement.”
The grain export deal will expire on Nov. 19, but efforts are underway to extend the agreement.
The grain export deal, which was brokered by the United Nations and Turkey in late July, has allowed the shipment of more than 9 million tonnes of grain and other food exports during the past three months. Prior to the deal, Russia, which invaded Ukraine on Feb. 24, had used a naval blockade to prevent the ships from leaving the Black Sea ports.
The war has taken an enormous toll on Ukraine’s ability to export and produce grain. A perennial top-five exporter of wheat and corn, Ukraine is projected to produce only 20.5 million tonnes of wheat in the 2022-23 marketing year, according to the US Department of Agriculture’s Foreign Agricultural Service (FAS), which would be the smallest crop in 10 years. It is forecast to export 11 million tonnes, which will be revised downward if Russia reinstates its naval blockade. If realized, it would be the lowest wheat export total since 2013-14. Its corn export totals are also expected to be significantly lower in 2022-23.
The conflict has contributed to a rise in grain prices and global food insecurity.