RUSSIA has re-entered the on again, off again freight arrangement allowing grain to be exported out of the Black Sea.
Late last month Russia pulled out of the deal, which is critical in allowing its adversary Ukraine to export grain, citing alleged attacks on its ships in the region.
However, a week later the Russian government has again agreed to allow safe passage of grain out of the Black Sea, although the deal is due to expire shortly, on November 19.
Episode 3 commodity analyst Andrew Whitelaw said Turkish support for the deal likely played a key role in Russia's decision.
"Turkey has a very important role in the Black Sea freight corridor and Russia would not want to risk putting the Turkish off-side and losing access to the Straits of Bosphorus, which brings Black Sea freight to the wider world," Mr Whitelaw said.
He said while grain markets had corrected, with the influential Chicago Board of Trade wheat futures contract giving up most of the gains made after news of Russia pulling out of the freight deal, there was still a sense there was more to play out in terms of long term freight arrangements.
"What we see here is only temporary, it is only for another fortnight and the market will be keeping a close eye on what happens from there," he said.
"There is a lot of controversy about this deal, Russia only wants to see the Ukrainian grain sold to countries with food security issues, so you would expect we will hear more in coming weeks."
The Black Sea grain export deal, brokered by the United Nations and Turkey in July, has so far seen the successful shipment of more than 9 million tonnes of grain and other food exports since it was started, allowing Ukraine to access its best option for grain exports, rather than costly routes to send product via eastern European ports.
However, in spite of the deal Ukrainian grain exports are still well down year on year.
Reuters last week reported Ukrainian 2022-23 exports were down 30 percent year on year.
It said Ukraine has exported 14.3 million tonnes of grain all up so far this marketing year, running from July 1, down from 20.6 million at the same period in 2021-22, including 5.4 millon tonnes of wheat, 7.7 million tonnes of corn and 1.2 million tonnes of barley.
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