Talks between Ukraine and Russia about resuming grain exports through the Black Sea seemed to have come to nothing on Wednesday 13 July. Meanwhile, the Turkish defense ministry reports that an agreement has been reached after all. The United Nations (UN) and Turkey were also present at these discussions. Previously in the red, international wheat markets registered a higher closing price at the end of the day when it appeared that the talks had come to nothing.
Update 13-7 21:10: The Turkish Ministry of Defense reported on Wednesday evening that an agreement had been reached on the export of Ukrainian grain by sea. According to Turkish Defense Minister Hulusi Akar, the parties will meet again next week to sign an agreement. The three countries are setting up a coordination center together with the UN to guarantee the safety of shipping routes. UN CEO Antonio Guterres will later issue a statement about today's talks.
Military delegations from Russia and Ukraine met on Wednesday, July 13, in the Turkish capital Istanbul. Representatives of the Turkish government and the UN were also present. Details surrounding this meeting have not yet been announced. For the time being, Turkey is the only one to come out.
First negotiations
The Russian state news agency TASS reports that Russia has made proposals to resolve the matter quickly and practically. TASS recorded this statement from a spokesperson for the Russian Ministry of Defense. It was the first time that both nations sat at the same table to discuss the subject. Since the Russian invasion, the two authorities have not negotiated with each other.
Russian troops have occupied several Black Sea ports, such as the port city of Kherson. Port and storage facilities have also been bombed and partly destroyed. All grain produced in Ukraine now has to be exported by rail or road to countries such as Poland and Romania. The largest Romanian port city of Constanța in particular is a gateway for Ukrainian grain, but that is only a partial solution to the problem. The hopelessly outdated infrastructure is not suitable for the transport of large volumes of grain and oilseeds. The Black Sea is the lifeline of grain exports. So far this month, export volume is 30% below last year's level, Ukraine's agriculture ministry announced.
No exports, no money
“When Ukrainian farmers cannot sell and export grain, there is no income and therefore no money to finance a new growing season.” Dutch-Ukrainian agricultural entrepreneur Kees Huizinga said this earlier Boerenbusiness. Together with five colleagues, Huizinga sat down with Prime Minister Mark Rutte on Monday afternoon, who made a lightning visit to the country. There was mainly the export issue discussed.
The international grain market also responded to the negotiations. The price of the September contract for wheat on the Matif closed at €344,25 on Wednesday evening. That is an increase of €2,50 compared to Tuesday's closing price. The American CME in Chicago also wrote green figures. The price rose 2,21% to $8,19 per bushel. After publication of the American Wasde-report the futures markets reacted negatively on Tuesday. Prices also fell on Wednesday before the Russian-Ukrainian talks ended. Initially it seemed that the talks did not have a positive outcome, after which prices rose. Only after the futures markets closed did news emerge that an agreement had been reached.
Monitor conversations
Next week, Turkish President Erdogan will speak with President Putin in Iran. Turkey has been trying for some time to restart grain exports by sea, via the Bosphorus. Attempts to do so have so far been unsuccessful. Whether that has changed remains to be seen. Reports about this today have been conflicting. The grain market is also affected by the negotiations. Analysts and stock exchange participants keep a close eye on the results, which can cause wheat prices to fall or rise.