Ukraine is one of the world’s leading agricultural producers and exporters.
Bulent Kilic | AFP | Getty Images
Russia and Ukraine on Friday signed a UN-backed deal to resume Ukrainian grain exports via the Black Sea.
The agreement, which will be implemented in the coming weeks, was signed in the Turkish city of Istanbul and brokered by the Ankara government.
Russian Defense Minister Sergei Shoigu was present as well as United Nations Secretary General Antonio Guterres and Turkish President Recep Tayyip Erdogan. Russian and Ukrainian officials sat at separate tables to sign the documents.
Millions of tons of wheat have been blocked in this war-torn country. Grain exporters from Ukrainian port cities like Odessa have been unable to ship their goods due to the conflict, fueling a global shortage of basic commodities and driving up food prices.
Ukraine is one of the world’s largest wheat exporters and Russian forces are blockading the Black Sea, where the grain silos of major Ukrainian ports are located.
The Bosphorus and the Dardanelles are the only waterways entering or leaving the Black Sea. This gives Turkey leverage over how the Russian Navy can move.
Bryn Bach | CNBC
The deal is important for global food supplies, but also because it is the first major agreement between the two sides since Moscow launched its unprovoked assault on February 24.
‘Glimmer of hope’
Although details of the agreement are currently unknown, it was to allow Ukrainian vessels to guide ships through mined waters, with a localized truce in place so that Russia would not attack. Turkish authorities are also expected to inspect shipments to rule out arms smuggling.
International onlookers are cautious about the deal and Russia will be closely watched to ensure it sticks to its part of the deal. Moscow, which accuses Ukraine of laying the mines, is also expected to restart its own grain exports to the Black Sea under the deal.
Erdogan said at the signing on Friday that the deal would save billions of people from facing starvation. He said he hoped the deal would mark a turning point in the war and called on both sides to end the conflict.
“We are proud to be instrumental in an initiative that will play a major role in solving the global food crisis that has been on the agenda for a long time,” Erdogan said, according to a translation.
António Guterres adopted an optimistic tone, saying there was now a beacon “on the Black Sea”. “A glimmer of hope [and] possibility…and relief in a world that needs it more than ever.”
Ukraine is one of the world’s leading agricultural producers and exporters. According to the United States Department of Agriculture, it is normally the world’s largest producer of sunflower meal, oil and seeds. it is also the world’s leading exporter of flour and sunflower oil and the world’s seventh largest producer of wheat.
The main wheat export destinations are Egypt, Indonesia, Turkey, Pakistan and Bangladesh.
December wheat futures prices on the Paris Stock Exchange fell about 5% after the deal was announced.
Turkish President Recep Tayyip Erdogan, right, and UN Secretary-General Antonio Guterres sit as two representatives of the Ukrainian and Russian delegations check their hands during a signing ceremony at Dolmabahce Palace in Istanbul , in Turkey, on Friday, July 22, 2022.
Khalil Hamra | PA