Ukraine grain deal: Reasons to be 'cautiously optimistic' of renewal, UN source says

A United Nations source on Wednesday said they have reasons to be "cautiously optimistic" on the renewal of a Black Sea grains export agreement, which is set to roll over on Saturday unless there are objections.

The UN-backed agreement on 22 July allowed grain shipments to resume from certain Ukrainian ports on the Black Sea, leading to some 10 million tonnes in shipments and helping to reduce international prices.

Ukraine used to export by sea 5 million to 6 million tonnes of agricultural products monthly before the Russian invasion in February blocked Ukrainian ports.

"The continuation, that's up to the parties, obviously – but all the signs that we have are positive signs in that direction," said the UN source, speaking on condition of anonymity.

Moscow suspended its participation in the agreement in late October but rejoined after four days, easing fears of further disruptions to grain exports from one of the world's biggest suppliers at a time of rampant global food inflation.

Optimism has grown that Russia will approve the deal's continuation after protracted talks over Moscow's grievances about impediments to its grain and fertiliser exports.

One issue is financial transactions, the UN source said, adding that the parties have been trying to find practical ways for the Russian Agricultural Bank to make financial transactions and payments while under Western-imposed restrictions.

The source added that they are exploring solutions with correspondent banks with their own systems to make progress on the issue.

Reuters reported earlier this month that Moscow wants the West to ease restrictions on state agriculture lender Rosselkhozbank, or the Russian Agricultural Bank, to facilitate Russian grain exports, according to four sources familiar with the request.

The UN on Tuesday said Secretary-General António Guterres had a "very frank and open discussion" on the Black Sea grain deal with Russian Foreign Minister Sergei Lavrov on the sidelines of the G20 summit in Bali.

(Reuters)