United Nations Secretary General António Guterres has welcomed the agreement by all parties to continue the Black Sea Grain Initiative to facilitate the safe navigation of export of grain, foodstuffs and fertiliser from Ukraine.

It is understood that the deal is extended for a further 120 days. The deal has facilitated the export of over 10m tonnes of grain and other foodstuffs from Ukraine since agreement was signed in July.

Chicago Board of Trade wheat prices fell 2.5% in early trading this morning as the news broke. The deal is good news for global food supply but efforts now will focus on solving the fertiliser crunch.

According to António Guterres, the United Nations is also fully committed to removing the remaining obstacles to exporting food and fertilisers from the Russian Federation.

Earlier this week the EU, US and UK issued a joint statement providing clarity for banks, insurers, shippers and others that they can continue to bring Russian food and fertiliser to the world.

Resumption of Russian fertiliser and ammonia exports could further soften nitrogen fertiliser prices in particular but also fertiliser in general.

The export price for Russian granular urea is trading at approximately $500/t (€480/t) almost $100 less than the price ($595/t (€570/t) from Egypt, which is currently a key European supplier.

Hope that ammonia trade resumes

There is hope the agreement will allow the resumption of ammonia exports from Russia for nitrogen production.

Russia accounts for a quarter of global ammonia exports, half of which is exported via a pipeline through Ukraine to the port of Yuzhny near Odessa.

Ukraine shut down this pipeline at the start of the war. The Black Sea grain deal brokered by the United Nations and Turkey in July to facilitate grain exports from the Black Sea also provided for the resumption of this trade.

Russia has complained that western countries are not doing enough to facilitate exports of Russian fertiliser, ammonia and grain.

It remains to be seen if the commitments and clarity provided in recent days is sufficient to restart this trade.