Wheat growing in a field
The International Rescue Committee said Russia’s decision would have ‘catastrophic consequences’ for food supplies © Yahya Arhab/EPA-EFE/Shutterstock

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Ukraine has said that 12 ships carrying grain left its Black Sea ports on Monday, despite Russia’s withdrawal from a UN-backed deal that allowed the passage of million of tonnes of grain during Moscow’s full-scale invasion.

The UN and Turkey, which co-brokered the so-called Black Sea Grain Initiative in July, approved the resumption of shipments, which had stopped on Sunday. Russia’s decision on Saturday shook global markets, pushing up wheat prices.

Oleksander Kubrakov, Ukraine’s infrastructure minister, said on Monday that “12 vessels left Ukrainian ports” and four more were heading towards Ukraine’s coast for loading.

“The UN and Turkish delegations provide 10 inspection teams to inspect 40 vessels aiming to fulfil the Black Sea Grain Initiative. This inspection plan has been accepted by the Ukrainian delegation. The Russian delegation has been informed,” he wrote on Twitter.

It is not clear how Russia will respond to Monday’s shipments. Dmitry Peskov, Russian president Vladimir Putin’s spokesperson, has questioned the feasibility of continued maritime Ukrainian grain export shipments without Russia’s backing.

“In conditions when Russia talks about the impossibility of guaranteeing the safety of navigation in these areas, such a deal is hardly feasible, and it takes on a different character: much more risky, dangerous and unguaranteed,” Interfax news agency quoted him as saying.

Without making clear whether Russia would try to stop such shipments, he said “contacts continue with the Turkish side, as well as with the UN through the diplomatic and other departments”.

Insurers at Lloyd’s of London providing cover for grain and other foods shipped out of Ukraine under the Black Sea agreement said they would pause quoting on new shipments until a new deal could be agreed.

Chris McGill, head of marine cargo underwriting at insurer Ascot, said insurance that had already been issued still stood. He added: “We’re hopeful negotiations will be successful and we can recommence quoting.”

Russia announced on Saturday its decision to suspend participation in the agreement, which involved joint inspections of vessels in Istanbul, after what it claimed was a Ukrainian strike on its navy vessels in Sevastopol, the port on the Crimean peninsula that it annexed in 2014.

Turkish president Recep Tayyip Erdoğan said he would try to salvage the deal. “Although Russia is hesitant on this issue because it has not been shown the same ease, we will decisively continue our efforts to serve humanity,” he said in a speech on Monday.

Turkey’s defence minister Hulusi Akar told his Russian counterpart
Sergei Shoigu on Monday that he expected Moscow to “reconsider” its
decision to withdraw from the pact because the grain initiative must
be kept separate from the conflict, according to a statement from his
office.

Turkey’s close relations with Kyiv and Moscow helped it broker
the UN-backed deal in July and more than 9mn tonnes of
Ukrainian wheat and corn have since sailed through the Black Sea.

Wheat futures on the Chicago Board of Trade rose as much as 7.7 per cent to $8.93 a bushel on Monday morning and were later trading up 5.7 per cent at $8.29 a bushel. Corn rose almost 3 per cent to $7 a bushel.

Analysts had warned that Russia’s withdrawal from the deal would hit poorer nations, with the International Rescue Committee saying it would have “catastrophic consequences” for food supplies.

Under the deal, Moscow had guaranteed safe passage of grain-carrying cargo ships from previously blockaded Black Sea ports. The suspension immediately affected 218 ships, Ukrainian authorities said. Of those, 95 had already left its ports, 101 were waiting to collect grain and 22 were loaded and waiting to set sail.

The UN, Turkey and Ukraine, who had been working together with Russia to move the grain through the Black Sea, informed Moscow that 16 vessels both inbound and outbound were going to move through the grain corridor on Monday. The UN said some of these ships had set sail.

The Kremlin’s announcement on Saturday surprised grain traders and analysts who, while doubtful that the July deal would endure beyond its mid-November deadline, did not expect a sudden termination.

Dennis Voznesenski, an agriculture analyst with Rabobank, said the short-term impact of the Russian move was evident in the rise in prices, which could be sustained if the deal was not salvaged.

Ukraine, long known as the breadbasket of Europe, is the world’s fifth-largest exporter of wheat. “If you’re a Ukrainian farmer, you have no incentive to plant the longer this goes on because the export market has gone,” said Voznesenski.

Additional reporting by Robert Wright in London and Nic Fildes in Sydney

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