Prior to the July 17th expiration of the current round of the Black Sea Grain Initiative, the U.N. Secretary-General Antonio Guterres apparently appealed on humanitarian grounds to the President of the Russian Federation with proposals for an extension. In the event Russia withdrew from the agreement possibly as retribution for damage to the Kerch Bridge and failure to wring concessions from the EU. In addition Russia inflicted damage on installations in the Ports of Odessa, Chornomorsk and Yuzhny with missile bombardments over the three nights of July 17th through 19th. Russia has mined the approaches to the three ports and has declared any vessels bound for Ukraine as potentially “hostile”
The Russian Federation demanded a relaxation of financial transactions through the Russian Agricultural Bank and also other concessions including the use of a pipeline that passes through Ukraine to facilitate export of fertilizer.
Although the United Nations maintains that the BSGI has prevented global hunger the reality is that most exports from Ukraine under the agreement were destined for developed nations.
To date 32.8 million tons of grain, oil seeds and oil have been shipped under the BSGI since inception a year ago. Corn represented half of the volume with an additional quarter comprising wheat and the remainder, sunflower meal and oil.
Despite the agreed components of the BSGI, Russia has deliberately obstructed shipment with 33 vessels leaving Ukrainian ports in May with 1.3 million metric tons, less than half the volume during April.
News of the cancellation raised CME prices for Wheat, corn and soy oil on Wednesday 19th. Discontinuation in shipment of grain and oil seeds from Ukraine will diminish World supply and raise prices. Events in the Black Sea indirectly influence the cost of production of eggs in the U.S.
It is now up to NATO as to whether a naval force will be assembled to allow free passage of grain vessels in convoy through the international waters of the Black Sea, risking an extension of the conflict.