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Ukraine, Russia grain, fertiliser could start moving in weeks under UN deal

Updated: Jul 21, 2022

Turkey says a deal to unblock the exports of Ukrainian grain amid the war and to allow Russia to export grain and fertilisers will be signed in Istanbul.

Russia and Ukraine will sign a deal to reopen Ukraine's Black Sea ports, Turkey says, a potential breakthrough that could ease the threat of hunger facing millions around the world as a consequence of Russia's invasion.

Ukraine and Russia are both among the world's biggest exporters of food, and Ukraine's ports, including the major hub of Odesa, have been blockaded by Russia's Black Sea fleet.

The halt to grain shipments during the five-month war has caused prices to rise dramatically around the world, and reopening Ukraine's ports could potentially avert famine.

On the Australian front, however, Thomas Elder Markets' Andrew Whitelaw wasn't holding his breath just yet - hear more on the Flow podcast player below:

Although Russia's ports have not been shut, Moscow had complained its shipments were hurt by Western sanctions. The United States and the European Union have adjusted their sanctions recently to spell out more clearly exceptions for Russian food and fertiliser exports.

Turkey, a NATO member with good relations with both warring countries, controls the straits leading into the Black Sea and has acted as a mediator on the issue. UN Secretary-General Antonio Guterres, who would potentially sign any agreement, was headed there.

Ankara said the parties would put in writing an accord they had agreed in principle at talks last week in Istanbul.

Full details of the agreement were not immediately released. It was due to be signed on Friday at the Dolmabahce Palace offices, President Recep Tayyip Erdogan's office said.

There was no immediate confirmation from Moscow.

The Kyiv government did not confirm a deal was set. The foreign ministry said another UN-led round of talks to unblock Ukrainian grain exports would take place in Turkey on Friday. Foreign ministry spokesperson Oleg Nikolenko said:

"In summary, a document may be signed which will bind the sides to (ensure) safe functioning of export routes in the Black Sea."

The US State Department said it welcomed the announcement and would hold Russia to account for implementing the agreement.

The United Nations and Turkey have been working for two months to broker what Guterres called a "package" deal: to resume Ukraine's Black Sea grain exports and facilitate Russian grain and fertiliser shipments.

Ukraine could potentially restart exports quickly, Ukraine's Deputy Agriculture Minister Taras Vysotskiy told Ukrainian television:

"The majority of the infrastructure of ports of wider Odesa - there are three of them - remains, so it is a question of several weeks in the event there are proper security guarantees."

The Ukraine war has caused inflation around the world both because of the global grain shortage and threats to energy supplies.

Russia on Thursday reopened its biggest gas pipeline to Germany at less than half normal capacity after a maintenance shutdown, raising worries of European energy shortages to come.

The resumption of gas flows via the Nord Stream 1 pipeline to Germany ended a nerve-jangling 10 days for Europe in which politicians expressed concern Russia might keep it shut altogether after closing it for repairs.

But with the flows still reduced, Germany's Economy Minister Robert Habeck accused Russia of blackmailing Europe over energy. The Kremlin denied that and blamed Europe for causing disruption with sanctions that complicated the pipeline's maintenance.

Inside Ukraine, Kyiv has accused the Russians of stepping up strikes on cities in recent weeks in a deliberate attempt to terrorise its population. Moscow denies deliberately attacking civilians and says all its targets are military.

In Kharkiv, Ukraine's second-biggest city, shells struck a crowded market. The regional prosecutor's office said three people were killed and 23 wounded in shelling of two districts. The chief of Kharkiv national police said there were no military targets nearby.

The main front lines have been largely frozen since Russian forces seized the last two Ukrainian-held cities in eastern Luhansk province in battles in late June and early July.

But Russia is shelling neighbouring Donetsk province in what Ukraine says is preparation for a potential new advance there. Russia aims to fully capture all of Donetsk and Luhansk on behalf of its separatist proxies.


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