Despite the groundbreaking deal to provide a safe corridor through the Black Sea, shipping companies are not in a hurry to export millions of tonnes of trapped grain from Ukraine. This is because shipowners are assessing the risk as explosive mines are drifting into the sea, and many still have doubts about how the deal will be developed.
The complexity of the agreement started a slow and cautious start, but it’s only valid for 120 days — and the clock started ticking last week.
The goal for the next four months is to extract approximately 18 million tonnes of grain from three Ukrainian ports that have been closed since the February 24 invasion of Russia. This gives about four to five large bulk carriers per day time to transport grain from ports to millions of poor people around the world facing hunger.
It also provides enough time for things to go wrong. Just hours after the signing on Friday, a Russian missile attacked the port of Odessa in Ukraine. This is one of those included in the agreement.
Another important element of the transaction is to provide assurance that Russian grain and fertilizer carriers and insurance companies will not be caught in the wider net of western sanctions. However, the agreement mediated by Turkey and the United Nations goes against the reality of how difficult and dangerous the agreement is to implement.
“We must now work very hard to understand the details of how this actually works,” said Guy Platten, secretary-general of the International Chamber of Shipping. St. of the world’s merchant fleet.
“Can we ensure and guarantee the safety of our crew? What about mines and minefields? There are many uncertainties and unknowns at this point,” he said.
Extracting wheat and other foods is very important for Ukrainian farmers who lack storage capacity when harvesting fields. These grains are essential for millions of people in Africa, the Middle East and some parts of South Asia, many of whom are already facing food shortages and, in some cases, famine.
Ukraine and Russia are major global suppliers of wheat, barley, corn and sunflower oil, fighting in the Black Sea region known as the “World Breadbasket”, boosting food prices and politics in developing and major countries. It threatens stability. Ban on some food exports and deepen the crisis.
The agreement provides that Russia and Ukraine provide “maximum guarantees” to ships bravely confronting their journey from the Black Sea to the ports of Odessa, Chornomorsk and Yuzny in Ukraine.
“The main risk we are facing is clearly mines,” said Munro Anderson, head of intelligence and founding partner of Dryad. Maritime security advisory firms work with insurance companies and brokers to assess the risks that ships may face along the route when mines laid by Ukraine to thwart Russia are drifting. I am.
Shipowners, shippers and insurance companies are trying to understand how transactions are done in real time.
“I think it will come [down] Michelle Wiese Bockman, a shipping and commodities analyst at Lloyd’s List, a global shipping news publication, said: ..
Vessels carrying this type of cargo typically carry 20 to 25 sailors, according to Bockman.
“These lives cannot be endangered without concrete and acceptable things for shipowners and charterers to move grain,” she said.
The Associated Press contacted marine insurance company refused to comment on whether to provide compensation for these vessels.
Ukrainian officials have expressed hope that exports will resume from one port within a few days, but also said it could take two weeks for all three ports to return to operation.
The war has disrupted world trade and has stranded more than 100 ships in many Ukrainian ports.
Lloyd’s List Intelligence data show that 22 bulk carriers and freighters have been stuck at three ports included in the export agreement since the war began in late February. About 13 are docked in Chorno Morsk, 6 in Odessa and 3 in Yuzny.
Some of those vessels may still have crew members who may be mobilized to start exporting grain.
Ukrainian traders were able to send grain through the Donau River. This brought buoy exports to about 1.3 million tonnes in May and up to about 1.8 million tonnes in June, but still less than half of the 3.6 million to 4.5 million monthly grain shipments. Prewar tonnage, according to Refinitiv’s Black Sea agricultural market analyst Svetlana Malysh.
According to Refinitiv’s trade flow, Russia exported approximately 27.2 million tonnes of wheat during the 2021-202 marketing year. This is the lowest level since 2017, partly due to the chilling effect of sanctions. Russia’s fertilizer exports also fell 25% in the first quarter of this year, compared to the same period last year, partly due to Western sanctions, Marish said.
For ships heading to three Ukrainian ports, a small Ukrainian pilot boat will guide the ship through approved corridors. The entire operation, including the schedule of ships along the route, will be overseen by the Joint Coordination Center in Istanbul, which is staffed by Ukraine, Russia, Turkey and the United Nations.
When the ship arrives at the harbor, it is loaded with tens of thousands of tonnes and returns to the Bosphorus. In the Bosphorus, representatives from Ukraine, Russia, the United Nations and Turkey board the ship and inspect their weapons. Vessels departing for Ukraine may also be inspected.
“The balance of power in this agreement is still in Russia,” said Anderson, the intelligence director of Dryad. Ukrainian ports outside the agreement increase the risk of attacks, he said.
“I think Russia wants … to be seen as the nation that dominates the story in the Black Sea,” Anderson said.