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Ukraine’s renewed grain export deal overshadowed as inspections limit pace

Exports of agricultural commodities from Ukraine’s Black Sea ports slowed to an average 86,000 mt/day in the week to Nov. 27, less than half of the year-earlier pace, with many traders blaming the inspections required under the UN-brokered deal that guarantees commercial ships’ safety.

The Black Sea Grain Initiative, as the deal is known, allowed Ukraine’s main ports to resume exports from August and so restored the main terminals from one of the world’s important suppliers for wheat, corn and sunflower oil.

The initiative had a 120-day term and was renewed Nov. 19 despite hesitation from Russia which had briefly withdrawn from the deal at the start of the month in retaliation for what it said was a drone attack on its ships in Crimea.

After that renewal, the more optimistic outlook for global supplies pushed down global prices for corn and wheat, but the mood has since darkened.

“I have the impression that [Russia] uses any excuse possible to slowdown the [inspection] process,” one trader said of Ukraine grain.

Under that process, every ship sailing to the three Ukrainian ports — Odessa, Chornomorsk and Pivdennyi — must be inspected by a team composed of representatives from Turkey, Russian, Ukraine, and the UN. They check the ships to ensure that they are not carrying unauthorized cargo or crew.

A spokesperson for the UN’s Joint Coordination Center, which oversees the implementation of the agreement, said that each team can perform two to three inspections a day.

On Nov. 28, there were three inspection teams operating and 22 inspections were carried out over the three previous days.

By contrast, on Nov. 1, there were 10 teams operating and 46 inspections were completed. At that point, Russia had indefinitely suspended its participation in the agreement and the inspection teams were made up of just UN and Turkish representatives, to whom Ukraine had delegated its inspection authority,

“Russia [has now] refused to allow more than three teams,” said another trader of grain from the country.

The Russian foreign ministry did not reply to a request for comment.

“The decisions taken at the JCC are based on consensus,” said the JCC’s spokesperson, when asked what was preventing more inspection teams from operating.
Source: Platts

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