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EU agriculture ministers met to discuss grain exports from Ukraine
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EU agriculture ministers met to discuss grain exports from Ukraine

created Lukasz KlufczynskiJuly 26 2023

European Union agriculture ministers met yesterday to discuss ways to export grain from Ukraine, essential to global food security, after Russia halted an export deal. At the same time, they want to protect prices for farmers in countries bordering the war-ravaged country.

Hunger is a growing threat

Ministers met in Brussels for the first time since Russia last week pulled the plug on a war deal that allowed grain to flow from Ukraine to countries in Africa, the Middle East and Asia, where famine is a growing threat and high food prices have pushed more people into poverty.

The agreement guaranteed that ships would not be attacked when entering or leaving Ukrainian ports, and a separate agreement facilitated the flow of Russian food and fertilizer.

Polish Agriculture Minister Robert Telus reportedly told an EU meeting that his country, along with Slovakia, Hungary, Romania and Bulgaria, are extending the ban on Ukrainian grain imports, but still allowing food to be transported through their countries to parts of the world.

In turn, Lithuanian Agriculture Minister Kęstutis Navickas suggested on Tuesday that grain export procedures from the Ukrainian-Polish border to Lithuanian ports could be moved to prevent grain from getting stuck in Poland and causing an oversupply that lowers prices for local farmers.

Ukraine is still trying to export by sea

Over the past few days, Russia has targeted Ukraine's critical grain export infrastructure as it vowed revenge for an attack that damaged a bridge between Russia and Moscow's annexed Crimean peninsula. Russian officials blamed Ukrainian drones for the attack.

Ukraine is also trying to continue exporting grain by sea. She sent a letter to the International Maritime Organization UNO, establishing its own temporary shipping corridor, where it stated that "will provide a guarantee of compensation for damages".

However, Russia warned that it would assume that ships passing through part of the Black Sea were carrying weapons to Ukraine. In an apparent tit-for-tat move, Ukraine said ships bound for Russia's Black Sea ports would be considered "carrying a military cargo with all the ensuing consequences".

The day before, the head of the UN called on Russia to renew the internationally negotiated agreement allowing the transport of grain from Ukrainian ports on the Black Sea. Antonio Guterres made the appeal at the three-day food summit in Rome, where the recent collapse of the grain deal between Ukraine and Russia was discussed. He warned that the most vulnerable will pay the highest price if transport does not resume, and noted that there are already negative effects on world prices wheat i corn.

Wheat prices up more than 14% since Monday, when Russia withdrew from the grain deal, a corn prices increased by more than 10%.

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About the Author
Lukasz Klufczynski
Chief Analyst of InstaForex Polska, with the Forex market and CFD contracts since 2012. He gained his knowledge in many financial institutions, such as banks and brokerage houses. He conducts webinars in the field of technical and fundamental analysis, investment psychology and MT4/MT5 platform support. He is also the author of many expert articles and market commentaries. In his trading, he puts emphasis on fundamental elements, relying on technical analysis.