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Russia Withdraws from Black Sea Grain Initiative

12.08.2023 18:35 "Agro Perspectiva" (Kyiv) — According to the report of the USDA Grain: World Markets and Trade (August 2023), just under a year since its inception, on July 17, 2023, Russia withdrew its participation in the Black Sea Grain Initiative (BSGI). The «grain deal» brokered by Turkey and the United Nations allowed Ukraine to export nearly 33.0 million tons of grain and other agricultural products from its ports in Chornomorsk, Odesa, and Yuzhny. Grain was the primary commodity exported under the agreement, with 8.9 million tons of wheat and 16.9 million tons of corn comprising most of the volume. Corn was primarily destined for China and the European Union, whereas wheat was exported to a wider range of countries including Turkey, Bangladesh, Egypt, and the European Union. For the entirety of MY 2022/23 across all transportation routes, USDA estimates that Ukraine exported 16.8 million tons of wheat (Jul-Jun) and forecasts corn exports at 28.0 million tons (Oct-Sep).

In MY 2023/24, combined wheat and corn production in Ukraine is forecast to be the same as the previous year, though beginning stocks are expected to fall considerably to more normal levels. As a result, exports are anticipated to fall to 10.5 million tons of wheat and 19.5 million tons of corn.

As of this publication, Ukraine’s Danube River ports remain operational export routes in addition to the EU Solidarity Lanes. However, in recent weeks, Russia has launched several attacks on Ukraine’s Odesa and Danube River ports, destroying grain and damaging infrastructure. Russia has signaled intentions to blockade Black Sea ports, adding further uncertainty to the future of Ukraine’s seaborne exports. In the absence of the BSGI, Ukraine is exploring options to ensure the continued flow of exports, including through improved Black Sea security, enhancements to overland trade routes, or expansions to Danube port capacity. USDA will continue to evaluate any apparent changes in Ukraine’s export capacity.

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