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Ukraine and Russia to Sign Grain Export Deal, Turkey Says

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(Bloomberg) -- An international deal to restart grain exports from Ukraine’s Black Sea ports that have been blocked since Russia’s invasion is expected to be signed Friday, potentially easing concerns of a global food crisis.

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The agreement could help revive the crops trade from one of the world’s biggest wheat, corn and vegetable-oil exporters. However, it is unclear how the deal will be implemented and whether Ukrainian sales can return to normal levels with Russia’s invasion still raging.

Turkish President Recep Tayyip Erdogan and United Nations Secretary-General Antonio Guterres will attend the signing, according to a statement from Erdogan’s spokesman. Ukraine’s infrastructure minister and the Russian defense minister will also be in Turkey, the host nation, for the event, their governments said.

Wheat futures in Chicago fell about 3.5% on Friday, while corn traded 1.1% lower.

Millions of tons of grain are stalled in Ukraine after the war stifled seaborne trade, which normally accounts for the bulk of the country’s sales to buyers spanning Africa to Asia. Russia’s forces have also targeted infrastructure at ports, and crop fields have caught fire in shelling, adding to the challenges to a resumption of sales.

The US National Security Council said in a statement that “we are hopeful though realistic about the prospects for re-opening Ukraine’s agricultural exports given how Russia has been blocking exports throughout the war, exacerbating global food insecurity. Success in ending Russia’s blockade will of course depend not only on Russia agreeing to a deal, but on Russia actually implementing it.”

Discussions about unblocking the ports have been going on for months, highlighting the difficulties in agreeing export terms in the middle of the war. Last week, talks between representatives of Ukraine, Russia, Turkey and the UN resulted in agreement on technical principles including setting up a monitoring unit in Istanbul.

Ukrainian President Volodymyr Zelenskiy said in his daily address to the nation that on Friday that “we are expecting news for our country from Turkey -- regarding unblocking our ports,” without elaborating.

While Turkey didn’t provide any details about the deal on Thursday, Ukraine had demanded guarantees that Russian troops won’t attack its ports once it de-mines passages to the facilities. And Russia’s foreign ministry previously talked about demanding that sanctions on Russian trade be relaxed in return for opening ports.

Ukraine is still shipping some grain, using rail, road and river routes via its European Union neighbors. However, volumes remain well below their normal pace, and the next harvests are under way, risking a storage crunch without a sales pickup soon.

(Updates with details of officials attending in third paragraph, prices in fourth.)

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