Black Sea grain corridor deal extended for further 120 days

The Black Sea grain corridor initiative will be extended, but only for another 120 days, an offiicial statement from the Ukrainian ministry of infrastructure said on Thursday.

The confirmation provides certainty for the balance of the year, but scotches rumours that the corridor could have been extended for a much longer period.

Alongside the 120 day grain corridor extension, the agreement also confirmed that the port of Mykolaiv was not included in the deal - at least not yet.

"The initiative for safe transport of agricultural products across the Black Sea has been extended for another 120 days. This decision was just taken in Istanbul. The United Nations and Turkey remained the guarantors of the Initiative,” the note said.

It was also said that Ukraine has appealed with a proposal to extend the initiative for at least 1 year and to include the Mykolaiv port in this initiative.

The UN also confirmed the extension in an official note. 

“The United Nations is also fully committed to removing the remaining obstacles to exporting food and fertilizers from the Russian Federation,” the official note showed.

That comes after rumors appeared in the market that Mykolaiv could also be reopened after Russian troops were pushed out of the Kherson region, to the left side of the Dnipro river.

However, there was no official confirmation that the Kinburn Spit - a strategic land feature that dominates the approach to the port and remains in Russian hands - is as yet under Ukrainian control.

The Ukrainian infrastructure ministry also said that proposals for the improvement of the efficiency for corridor activity were provided to the counterparties.

At the moment, there remains congestion of vessels waiting for inbound and outbound inspections in Istanbul, as currently the pace of inspections remaining at around 10 vessels per day planned, but in fact, it goes even slower.

Among the measures that were discussed among market participants were improvements for the inspection process, proposals to increase the number of teams - a measure that has already shown good results when Russia walked out of the deal in October and the remaining parties increased it to 10 teams working.

Those measures allowed the teams to inspect up to 40 vessels per day.

The other element that was discussed is the elimination of the requirement to inspect outbound vessels as they are leaving the Black Sea.

Russian authorities requested inspections to ensure vessels trading into Ukraine were not carrying military equipment or other war supplies, but some in the trade have argued that it makes no sense to check vessels leaving the region.

Since the signing of the deal back in July, Ukraine has exported around 11.1 million mt of agricultural goods, including 4.6 million mt of corn, 3.1 million mt of wheat, and around 730,000 mt of sunoil.