Ukraine grain export deal back as Russia resumes participation

Russia said on Wednesday it would resume its participation in a deal freeing up grain exports from war-torn Ukraine, reversing a move that world leaders had said threatened to exacerbate global hunger.

Moscow announced the sudden reversal after Turkey and the United Nations helped keep Ukrainian grain flowing for several days without Russian participation in inspections.

The Russian defence ministry justified the u-turn by saying it had received guarantees from Kyiv not to use the Black Sea grain corridor for military operations against Russia. Kyiv did not immediately comment on that, but has denied in the past that it used the agreed shipping corridor as cover for attacks.

"The Russian Federation considers that the guarantees received at the moment appear sufficient, and resumes the implementation of the agreement," the Russian ministry statement said.

The grain deal, originally reached three months ago, had dispelled a global food crisis by lifting a de facto Russian blockade on Ukraine, one of the world's biggest suppliers. The prospect that it could fall apart this week had revived fears of global hunger and pushed up prices.

Russia suspended its involvement in the deal on Saturday, saying it could not guarantee safety for civilian ships crossing the Black Sea after an attack on its fleet. Ukraine and Western countries called that a false pretext for "blackmail" using threats to the global food supply.

But Russia's suspension failed to stop shipments, which resumed on Monday without Moscow's participation, in a programme backed by Turkey and the United Nations. Turkish President Tayyip Erdogan said Russian Defence Minister Sergei Shoigu had told his Turkish counterpart that the deal would resume.

"The grain transports will continue as agreed before as of 12 (pm) today," Erdogan said, appearing to read from a note that an aide passed to him as he addressed members of his AK Party.

The prices of wheat, soybeans, corn and rapeseed fell sharply in global markets following the announcement, which eased concerns about the growing unaffordability of food.

Although Russia's suspension did not stop the flow of Ukrainian grain, insurance companies had paused issuing new contracts, raising the prospect that shipments could halt within days, industry sources said. But Lloyds of London insurer Ascot told Reuters after Wednesday's resumption announcement that it had resumed writing cover for new shipments.

"This is quite an unexpected turnaround," Andrey Sizov, the head of Russia-focused Sovecon agriculture consultancy, said of Russia's decision.

"Still, the deal remains shaky, as it is now back in guessing mode as to whether there will be an extension or not. With two weeks to go before the extension, the discussion around this topic will apparently continue," Sizov added.

The deal runs out on Nov. 19 and a European diplomat briefed on the grain talks has told Reuters that Russian President Vladimir Putin was likely to use the possible extension as a way to gain leverage and dominate next month's G20 summit in Indonesia.

German Foreign Minister Annalena Baerbock said the resumption showed the importance of standing firm in the face of Moscow's demands.