Reasons to be 'cautiously optimistic' on renewal of Ukraine grain deal -U.N. source

A United Nations source on Wednesday said they have reasons to be "cautiously optimistic" on the renewal of a Black Sea grains export agreement, which is set to roll over on Saturday unless there are objections.

The U.N.-backed agreement on July 22 allowed grain shipments to resume from certain Ukrainian ports on the Black Sea, leading to some 10 million tonnes in shipments and helping to reduce international prices. Ukraine used to export by sea 5 million to 6 million tonnes of agricultural products monthly before the Russian invasion in February blocked Ukrainian ports.

"The continuation, that's up to the parties, obviously - but all the signs that we have are positive signs in that direction," said the U.N. source, speaking on condition of anonymity.

Moscow suspended its participation in the agreement in late October but rejoined after four days, easing fears of further disruptions to grain exports from one of the world's biggest suppliers at a time of rampant global food inflation.

Optimism has grown that Russia will approve the deal's continuation after protracted talks over Moscow's grievances about impediments to its grain and fertilizer exports.

One issue is financial transactions, the U.N. source said, adding that the parties have been trying to find practical ways for the Russian Agricultural Bank to make financial transactions and payments while under Western-imposed restrictions.

The source added that they are exploring solutions with correspondent banks with their own systems to make progress on the issue. Reuters reported earlier this month that Russia wants the West to ease restrictions on state agriculture lender Rosselkhozbank, or the Russian Agricultural Bank, to facilitate Russian grain exports, according to four sources familiar with the request.

The U.N. on Tuesday said Secretary-General Antonio Guterres had a "very frank and open discussion" on the Black Sea grain deal with Russian Foreign Minister Sergei Lavrov on the sidelines of the G20 summit in Bali.