Talks in progress for the supply of Russian grain to Bangladesh are being held up by the reluctance of Bangladeshi banks to open letters of credit (L/Cs) in favour of Russian suppliers, according to Russia's ambassador to Bangladesh, Ekaterina Semenova.

She says supply chain disruption is also causing difficulties arranging the government-to-government contract to supply substantial quantities of Russia's bumper harvest of wheat to Bangladesh.

Reluctant banks

Semenova said she found local banks' reluctance to open L/Cs for Russian grain suppliers "surprising because agricultural commodities have been exempted from sanctions" and suggested that the disconnection of Russian financial institutions from the SWIFT electronic messaging platform need not be an insurmountable obstacle.

"Only seven Russian banks have been barred from using this system. The rest are free to use it. There are certain apprehensions among Bangladeshi financial institutions...so, there should be no problem issuing an L/C," she told the Business Standard.

Supply chains choked

The ambassador also alluded to supply chain and logistics difficulties, including restrictions on Russian ships entering certain ports and problems obtaining insurance for ships and cargoes.

Separately, Russian and Ukrainian negotiators have agreed a deal to end to the months-long Russian blockade of Ukraine's Black Sea ports and export millions of tonnes of stranded

Ukrainian wheat, corn and other crops. The deal is expected to be approved today.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.