Russia has U-turned on leaving the deal to allow grain shipments from Ukraine just days after suspending its support, alleviating concerns over the global food supply network.
On Saturday (29 October), Moscow quit the black sea grain initiative, citing an attack on the port of Sevastapol in Crimea.
Russia warned that without its involvement it would be dangerous for ships to keep sailing, but vessels have continued to use the route to ship grain, reports the BBC.
Turkey intervention
Turkish president Recep Tayyip Erdogan revealed the change after a call between the Russian defence minister and his counterpart in Ankara.
Maritime specialists Lloyd’s List reported Moscow had received written commitments that the corridor would not be used for military operations.
Turkey and the UN brokered the original deal in July that has resulted in 9.8m tonnes of grain, oil and soya beans being transported from Ukraine, lowering global food prices.
As previously covered in the IOE&IT Daily Update, the cost of grain had risen on Saturday’s announcement by Russia, but have now begun to subside.
Food supply chain
Wheat futures fell 6.4% at $8.45 a bushel, while corn was down 2.4% at $6.81 a bushel, reports the FT.
Insurers at Lloyd’s of London said they had resumed offering quotes to cover vessels under the grain deal, after previous reports stated that war risk cover had become harder to find on the insurance market.
Russian exports hindered
Turkey’s foreign minister Mevlüt Çavuşoğlu said that Moscow wanted to export more of its own agricultural products as part of the agreement.
“Russian fertiliser and grains are not on the list of sanctions but ships that will carry these are unable to dock, [insurance] payments are not being made. The ships of many countries are hesitant about transporting these cargos,” he said.
Accrording to Reuters, Russian president Vladimir Putin has reserved the right to withdraw again from the agreement.
Future negotiations
The deal ends on 19 November and those involved still have to agree extending it, although the Kremlin has equivocated on whether to continue.
"Before making a decision on an extension, we will need to give an overall assessment of the effectiveness of the deal," Putin's spokesman Dmitry Peskov said, according to The Moscow Times.