ContributionsDry CargoEurope

What’s happening with grain shipments out of the Black Sea?

Shaun Robertson, an intelligence analyst at Palaemon Maritime, a company which provides specialist marine hardening equipment, provides an update on the Black Sea Grain Initiative.

Since the beginning of the war in Ukraine on February 24, grain shipments from the country have ceased. However, a deal brokered by the United Nations and Turkey in July this year has allowed grain shipments to resume from three Ukrainian ports. This article will briefly explain the situation and provide a current update.

Grain shipments from Ukraine are vital to the world’s food supply. The lack of grain and other foodstuffs, like corn and seeds, in addition to fertilisers, has been disastrous for countries in the Middle East and Africa, causing acute hunger and even famine. The UN World Food Programme imports 50% of its wheat from Ukraine, and African countries can import anywhere from 15-70% of their grain imports from Ukraine and Russia. Turkey also relies on these imports, one reason it has played a vital role in brokering the grain deal. Roughly 20 million tons of grain from last year’s harvest are still in silos in Ukraine, with a further estimated 20 million tons from this year’s crop.

A new deal created on the 22nd of July has allowed grain shipments to leave Ukraine with the first ships already on test voyages. They are protected by a ten nautical mile corridor which is to be covered by Ukraine and Russia with no military assets allowed within it. Exports from Ukraine centre around the three ports of Odesa, Chonomorsk and Yuzhny. The United Nations has emphasised that the deal is purely commercial and not humanitarian, which involves contracts within the shipping industry. The estimated achievable exports from Ukraine are 2-5 million tonnes a month. Russia has been strict on ships needing inspections due to fears of weapons and other war material being smuggled into Ukraine, and as such, checks have been set up. On the 3rd of August, the first ship to start test runs passed inspections showing that the system could be worked.

The deal for exports out of Ukraine is a forward step in helping world markets that the war has decimated, and the maritime industry will play a key role in helping. As of the 13th of September, global food prices have begun to drop and access to vital Ukrainian grain is easier for more impoverished areas.

The UN Coordinator for the Grain Deal stated that 2.8 million tons of grain on 129 fully laden ships had departed the Ukrainian ports since the start of the deal. These figures are hopeful considering the target of 2-5 million tons a month. By the time of publishing, the tonnage figure should have hit over 3 million.

Approximately one-third of exports go to lower-income nations. These shipments mean that the deal is helping these nations recover from the food price crisis at the start of the year. Countries are directly purchasing grain like Egypt and Kenya, whilst other countries are being aided through the UN World Food Programme, which is buying grain for countries like Afghanistan and Yemen. It should also be noted that grain is going to more developed economies too, which is further helping to drive prices down worldwide.

Despite this progress, fears remain over whether the deal will be achievable and whether Ukraine and Russia will adhere to the ten nautical miles protected zone. Russia is also threatening to pull out of the agreement three months after its inception, which commentators argue would have minor losses for Russia but massive repercussions for Ukraine. As Russia has sanctions against it, strategically, the nation could not afford to let Ukraine prosper over a vital part of its economy being restarted. Fears over rogue sea mines remain too. However, progress is still being made in the face of uncertainty.

Splash

Splash is Asia Shipping Media’s flagship title offering timely, informed and global news from the maritime industry 24/7.
Back to top button