Deal to lift Ukraine grain blockade could be signed today

The deal, which is reportedly due to be signed at 1630 hrs local time in Istanbul, would also release ships and their crews trapped since Russia’s invasion of Ukraine. A number of these are thought to have grain on board but its condition, by now, could limit its uses.

According to the Financial Times newspaper, unless derailed at the last minute, the deal would release wheat, corn and other crops stranded in Ukraine’s ports, averting fears of a global food crisis. Turkey’s President, Recep Tayyip Erdoğan, and United Nations Secretary-General, António Guterres, will attend the signing, the newspaper said, following key roles in negotiating the deal.

However, in view of the continuing hostilities following Russia’s invasion of Ukraine, there remained much uncertainty through the early hours of Friday. According to some reports, the deal may depend on the signing of a memorandum of understanding between the United Nations and Russia on allowing exports of food, fertilisers, and raw materials used in the manufacture of fertilisers.

These are seen as essential in averting growing food shortages in many countries across the Middle East and Africa which depend on grain, a staple food, from Ukraine, the world’s fifth largest producer. If the deal fails, the food crisis will only worsen because harvesting of this year’s grain crop in Ukraine has already begun but many silos are full.

The Financial Times reported that under the proposed deal, ships travelling to and from Ukrainian ports will be inspected at monitoring sites in Turkey to allay Moscow’s concerns over weapons smuggling. An unnamed third non-NATO country may provide mine-sweeping duties, if needed, to clear a safe passage for ships.

For dry bulk owners, there will be some hard decisions to make. Asset and seafarer safety, insurances, access to essential ship services and supplies, and communications will be amongst them.

However, if cargo liftings do go ahead, they could provide a boost to the relatively firm dry bulk market in the smaller sizes. Rates have risen over recent months as a result of various factors including the lifting of Indonesia’s coal ban, a better-than-expected and earlier grain harvest in South America, and rising coal imports in Europe, notably from the US.

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