A deal could be signed as early as next week that would open a corridor to allow Ukraine’s grain exports to flow more freely from the Black Sea, nearly five months after Russia invaded the country.
The agreement could spare the bulker market a blow later this year when the country’s exports seasonally play a key role in global dry bulk volumes.
Turkish defence minister Hulusi Akar said a deal will be signed next week that will see his country ensure the safety of Black Sea export routes and set up a coordination centre with Ukraine, Russia and the United Nations, according to Reuters and Al Jazeera.
But UN secretary general Antonio Guterres said the talks to resume grain exports have made progress, but he was less certain that a deal is imminent.
“Next week, hopefully, we’ll be able to have a final agreement. But, as I said, we still need a lot of goodwill and commitments by all parties,” he said, according to an Al Jazeera report.
Officials from Russia and Ukraine are involved in the four-way talks with Turkey and the UN.
A senior UN official told Reuters that most sticking points in the negotiations have been overcome.
The deal will potentially involve Ukrainian naval vessels guiding bulkers through Black Sea waters where sea mines have been installed. Russia would agree to a truce during the shipments, and Turkey would carry out inspections of the vessels, the newswire reported.
Russia’s invasion of Ukraine has slammed exports from a major supplier of the global market, shaking up bulker trades. While many impacts of the disruption have been positive for bulker rates, Ukraine’s peak grain season is later in the year.
Ukraine expects to harvest more than 50m tonnes of grain this year, down from a record 86m in 2021, according to Reuters.
Wheat exports, only a part of the picture, have shown a significant decline.
Between February and May, Ukraine exported 1.4m tonnes of wheat, a plunge of 1.6m tonnes compared to the same period of 2021, according to International Grain Council data cited by shibroker Simpson Spence Young.
“Ukraine typically exports the largest amount of wheat in the third quarter, and this year the freight market is lacking the boost to vessel employment that Ukrainian grain usually provides,” the broker said in a Monday report.
