Well, that didn’t last long.
After receiving written promises from Ukraine that the safe-passage corridor will only be utilized for grain exports, Russia’s Defense Ministry indicated on Wednesday that Moscow is resuming its participation in the Black Sea grain-export deal.
This a reverse from Russia’s hawkish stance a few days ago when it withdrew from the internationally-mediated agreement, citing an accusation that Kiev launched a “massive” drone strike on the country’s Black Sea Fleet in Crimea’s Sevastopol.
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Ukraine has stated numerous times that it will not use the corridor for military purposes.
Even before Russia’s confirmation, Turkish President Recep Tayyip Erdogan had already stated that supplies via the Ukraine grain corridor would begin on Wednesday, citing guarantees from Russian officials to Turkish colleagues.
Despite Moscow’s pull out, the United Nations proceeded with the grain shipments. Some ships continued to leave Ukraine on Monday and Tuesday, but the UN stated late yesterday that no shipments were scheduled for Wednesday.
The UN-brokered deal allowed Ukraine to transit more than 9 million tonnes of grain and oilseed goods, while Russia was allowed to export food and fertilizer, which helped to reduce food prices by 15% from their March peak when the war made the route dangerous.
Ukrainian Foreign Minister Dmytro Kuleba claimed the suspension of the deal, based on “false pretexts of explosions 220 kilometers away,” would halt the movement of 2 million tons of grain, enough to feed over 7 million people.
But the deal is far from stable. The grain deal was set to expire on November 19, and Russia has previously stated that it had severe flaws. Russian President Vladimir Putin wasn’t subtle in letting his protestations on the grain deal known to the public. Back in September, he already threatened that Russia could pull out of the deal, calling it “another blatant deception,” and “a swindle.”
Following the news, Chicago wheat futures sank more than 6% to $8.5 per bushel on Wednesday, dropping abruptly from the previous session’s three-week high of $9.
Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
