Ukraine Strikes Deal With Russia

28/10/10 -- Vladimir Putin has called on his old mate Ukraine PM Mykola Azarov to call in a few favours, and presumably assure him that cutting off last year's gas supply was merely a clerical error.

Reports earlier in the week that Russia was potentially in the market to do some sort of swap deal with Ukraine appear to have held some truth.

The story was that Russia might be prepared to let some of it's milling wheat reserves go in exchange for feed grains. What wheat Russia does have left reputedly contains a high percentage of milling grade, which conveniently is exactly what Ukraine is short of.

The Ukraine daily newspaper Delo is today apparently carrying a story that the two PM's have shook hands on a deal for Ukraine to supply Russia with 2 MMT of feed grain (probably corn), although there is no mention of milling wheat travelling in the opposite direction as yet.

Other reports circulating out of Ukraine today suggest that some kind of export ban or elaborate red-tape filled restrictions will now apply to sunseed/rapeseed and/or their by-products.

In light of the queue of ships that have been waiting to leave Ukraine already loaded with grain of late, it would be a brave sole who would now charter a vessel to attempt to outload these products. That effectively rules Ukraine out as a supplier for a while until these glitches are ironed out.

As and when things do eventually return to normal, Ukraine's status as a reliable supplier (which let's face it wasn't exactly great anyway) now looks even shakier than that bloke they had on MasterChef last night.