The clock is ticking: deadline for Black Sea grain deal renewal approaches
The safe corridor to facilitate grain export from Ukraine to many industries, including pet food, expires on 18 March 2023.
Mediations continue for the safe passage of critical ingredients from Ukrainian ports, but so far, there is no quorum to extend the Black Sea grain deal, which was renewed for 120 days in November 2022.
Russia agreed to a 60-day extension earlier this week, but Ukraine is pushing for 4 months.
Ukrainian Deputy Prime Minister Oleksandr Kubrakov warned that Russia’s position to extend the deal for only 2 months “contradicts the document signed by Turkey and the United Nations.” According to the TASS Russian News Agency, the grain deal will automatically extend this Saturday if there are no objections.
The United Nations Secretary-General António Guterres reiterated that the UN “remains fully committed” to the deal and “will do everything possible to preserve the integrity of the Black Sea Grain Initiative and ensure its continuity.”
Biding time
Grains are a key ingredient in pet food formulation, and manufacturers are always on the lookout for stable supplies. In November 2022, producers pursued alternative markets, albeit more expensive, as the situation looked grim.
Both the UK Pet Food and the Pet Food Industry Association of Southern Africa (PFI) confirmed to GlobalPETS that manufacturers are waiting to see how the situation unfolds this time.
The UK’s Agriculture and Horticulture Development Board said that optimism over the Black Sea grain initiative would “likely continue to weigh on prices” until a negotiation is reached.
The numbers
The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) said the deal had allowed the export of 24 million short tons of grain and a secure passage of more than 1,600 vessels through the Black Sea. In the first 2 months of 2023, 6.5 million short tons were exported under the initiative.
Corn and wheat make up the majority of food exports (77%), followed by sunflower meal and oil (11%) and barley (4.3%).
Joe Glauber, a senior research fellow at the International Food Policy Research Institute (IFPRI), told GlobalPETS that through the deal, wheat exports had averaged about 875,000 short tons per month while maize exports reached about 1.7 million tons per month.
Glauber added that Ukraine has “benefited significantly” from the deal exporting 3 million tons of grain a month along with “significant quantities” of oilseeds and oilseed products.
According to the UN, China has received the largest share of the total grain exports, with more than 5 million tons, followed by Spain (4.2 million) and Turkey (2.7 million)