UKRAINE- Negotiations aimed at safeguarding shipping in the Black Sea hit a major snag as Ukraine unexpectedly withdrew from a crucial deal, leaving the agreement in limbo.
The deal, which had been the subject of months-long discussions between Russia and Ukraine and was facilitated by Turkey with the backing of the United Nations, collapsed just before its anticipated announcement by Turkish President Tayyip Erdogan ahead of Turkey’s significant regional elections on March 30.
The primary objective of the agreement was to provide security assurances to merchant vessels navigating the Black Sea, shielding them from potential military actions by either Russia or Ukraine.
Modeled per the Montreux Convention, which regulates naval passage through Turkish straits, the deal stipulated that neither Russia nor Ukraine would engage in hostile activities against commercial ships traversing the region.
Although Ukraine had initially signaled its consent to the agreement, it refrained from formally endorsing it, opting instead to allow Erdogan to proceed with its announcement.
However, in a surprising turn of events, Ukraine reversed its position at the eleventh hour, withdrawing its support and leaving the fate of the agreement uncertain.
The motives behind Ukraine’s abrupt reversal remain mysterious, prompting speculation among analysts and observers. Some suggest that ongoing tensions and strategic considerations, as emphasized by Ukrainian President Volodymyr Zelenskiy earlier in the year, might have influenced the decision.
Ukraine grain acreage trending lower
In related news, grain production in Ukraine has remained unprofitable since Russia invaded the country in February 2022, which will likely translate into decreased grain acreage in the 2024-25 marketing year, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.
The FAS provides that there will be a 3% decrease in the total area of grain (including wheat, corn, barley, and rye) planted for the year 2024-25.
The two largest grain crops, wheat and corn, are expected to see a decline of 5% and 8%, respectively, with their planted areas projected to be 4.8 million and 3.6 million hectares.
Also contributing to the decline in planted area for grains is “lower profitability compared to oilseeds,” the FAS said.
According to the FAS, Ukraine’s grain production is anticipated to decline by 6% from the previous year, as lower yields are also expected. Wheat production is estimated to reach 21.1 million tonnes, which is 2 million tonnes less than the output in 2023-24. Similarly, corn production is predicted to decrease from 28.3 million tonnes to 26.6 million tonnes.
Additionally, Ukrainian wheat exports are expected to drop by 27% to 12.8 million tonnes, which is the lowest level since 2014-15. Additionally, corn exports from Ukraine are anticipated to decline by 9% year-on-year to 22.3 million tonnes, which is the lowest level since 2017-18.
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