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US moves to enable ag exports from Ukraine region

A farmer harvests grain in Odessa, southern Ukraine in July

Facilitating Russian food and fertiliser exports will not break Western sanctions, the United States government has told firms as talks progress to resume Ukrainian grain shipments.

Enabling those Russian exports is a key part of attempts by the United Nations and Turkish officials to broker a package deal with Moscow that would also allow for shipments of Ukrainian grain from the Black Sea port of Odessa, which have been brought to a standstill by the war.

Rabobank Australia agricultural analyst Dennis Voznesenski spoke with Flow listeners on Friday about the market's expectations on grain movements from the Black Sea:

The written US clarification came a day after Russia, Ukraine, Turkey and UN officials met in Istanbul for talks aimed at resuming Ukraine's grain exports. 

Turkey announced the parties would return next week to sign a deal.

"The United States strongly supports efforts by the United Nations to bring both Ukrainian and Russian grain to world markets and to reduce the impact of Russia's unprovoked war on Ukraine on global food supplies and prices," the US Treasury Department said.

The war in Ukraine has sent prices soaring for grains, cooking oils, fuel and fertiliser, stoking a global food crisis.

Eduard Zernin, head of the Russian Union of Grain Exporters, described the US move as "an act of goodwill" and a "real step in the fight against world hunger", telling Reuters:

"We sincerely hope that other countries involved will follow this example and issue the necessary clarifications and licenses in order to remove hidden sanctions that hinder the supply of grain to countries in need."

Russia's February 24 invasion and blockade of Ukraine's ports has stalled exports, leaving dozens of ships stranded and some 20 million tonnes of grain stuck in silos at Odessa.

Moscow has denied responsibility for worsening the food crisis, instead blaming a chilling effect from Western sanctions for slowing its own food and fertiliser exports, and Ukraine for mining its own Black Sea ports.

Ukraine and Russia are major global wheat suppliers, and Russia is also a large fertiliser exporter, while Ukraine is a significant producer of corn and sunflower oil.

The US Treasury made clear the sale and transport of agricultural commodities, as well as medicine and medical devices, was allowed and would not be breaching a raft of sanctions Washington has imposed on Russia.

The US also stressed there were no sanctions on Russia's production, manufacture, sale or transport of agricultural commodities, including fertiliser, and that providing insurance or reinsurance for the transportation or shipping of those products was not prohibited.

Imports of Russian fish and seafood to the United States are banned under the sanctions.

As the UN-led talks got underway in May to revive Ukrainian and Russian food exports, US Ambassador to the United Nations Linda Thomas-Greenfield said Washington was prepared to give written assurances - known as "comfort letters" - to shipping and insurance companies in relation to Russian exports.


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