IS GRAIN GETTING BACK ON TRACK?

With the continuing war in Ukraine, the UN has extended the Black Sea Grain Initiative in an attempt to get a flow of grain out of the country again

As the war in Ukraine has continued to affect the movement of bulk shipments out of Ukrainian ports, there has been a renewal of the Black Sea Grain Initiative put in place to try and ease the flow of grain out of the country.

That said, the Russian government has said that the agreement may not continue going forward with the Kremlin saying that promises to stop blocks to Russian imports of agricultural products and fertilisers had not materialised.

The agreement allows for the export of food and fertiliser, including ammonia, from three Ukrainian Black Sea ports. While there are no sanctions in place on food and fertilisers, the Russian government has said that problems over insurance and payment procedures are resulting in the initiative being impossible to work in practice.

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The Black Sea Grain Initiative, a UN-brokered deal aimed at supplying markets with food and fertiliser amid global shortages and rising prices, exacerbated by the Ukraine war, was extended in March, although there have been many reports since that the system is not necessarily working smoothly.

The announcement of the initiative’s extension was released by the UN Secretary-General’s spokesperson’s office, which emphasised that the Initiative allows for the “facilitation of the safe navigation for the exports of grain and related foodstuffs and fertilisers, including ammonia, from designated Ukrainian seaports.”

Following the invasion of Ukraine by Russian forces in February 2022, the Initiative has been one of the few areas in which the Russian and Ukrainian governments have been able to reach agreement. It came about in response to the sharp increase in prices for food and fertilisers around the world: Russia and Ukraine are the main suppliers of these products to world markets and their ability to export was significantly curtailed once hostilities began.

Since the signing of the Initiative in July 2022, some 25m metric tons of grains and foodstuffs have been moved to 45 countries, and the initiative has been credited with helping to calm global food prices, which reached vertiginous highs in March 2022. Following the implementation of the Initiative, prices began to fall and, a year later, had dropped some 18%, according to the UN.

The deal was mediated by the UN and the government of Turkey and as part of the agreement, a Joint Coordination Centre (JCC) was established in Istanbul, to monitor the implementation of the Initiative.

The UN statement described the Black Sea Grain Initiative, alongside the Memorandum of Understanding on promoting Russian food products and fertilisers to the world markets, as “critical for global food security, especially for developing countries”.

A further statement by the UN issued at the start of April noted that the JCC had not been able to conduct inspections as the parties needed more time to reach an agreement on operational priorities. Following intensive discussions within the JCC, supported by the United Nations and Turkey, routine inspections were set to resume later in April.

As of 1 April, there were 50 vessels waiting to move to Ukrainian ports. The JCC has overseen and enabled the safe export of more than 27.5m metric tonnes of food since the Initiative was signed, contributing to the lowering of food prices.

Through this Initiative, an essential source of supplies for the World Food Programme has been restored, with over half a million metric tonnes of wheat having been transported since August, supporting ongoing humanitarian operations in Afghanistan, the Horn of Africa and Yemen, according to UN figures.

“It is critical that all sides ensure the integrity and full implementation of the Initiative,” the UN spokesperson added.

Immingham boosts grain

Grain handling at the Port of Immingham is increasing thanks to the new opportunities presented by investment from owner Associated British Ports (ABP).

Two metal plate bunds, which can be set up on any quay on any surface, have been installed. They can also be sanitised between vessel discharges, meaning grain for human consumption can be handled. Operations are using the new Liebherr 420 mobile harbour cranes, which means faster and more time-efficient handling.

Simon Bird, regional director of Humber ports, says: “This is a costeffective method of ensuring we can load on to any quay in inner dock. It’s a developed and proven capability for operations to receive and load human consumption grains, which is part of our key competitiveness.

According to the UN: “This critical work is done against the backdrop of the ongoing war and active hostilities. We do not underestimate the challenges, but we know they can be overcome.

The UN team is working closely with all sides, taking into consideration all parties’ concerns. The global humanitarian benefits of the Initiative are evident and are not limited to exports to specific low-income countries. It is in everyone’s interest to keep it going.”

The UN Food and Agriculture Organization reported on the March food price index, which marked a further drop of 2.1%. The index has fallen 20.5% in the last year. The renewal of the Black Sea Grain Initiative in November and March has contributed to this fall.

“ABP is keen to support our customers and we’re delighted that one of the first to use the new grainhandling facility is Viterra, one of the UK’s leading grain marketers. The Humber is a key player in the market and our continued investment into infrastructure and equipment maintains our agility and resilience.”

Globally, Viterra is a world-leading agriculture network, active in 37 countries worldwide, marketing more than 100m metric tonnes of agricultural commodities per year. The company renewed its relationship with ABP Humber in April 2022 with the opening of a new 35,000mt storage facility located on the ABP Humber International Terminal. This is complemented by additional storage within ABP’s Bulk Park facility located within the Port of Immingham.