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The Guardian - UK
The Guardian - UK
World
Joanna Partridge

Grain deal clears one of many hurdles to get Ukraine’s crops to market

Cargo ships waiting to enter the Sulina canal from the Black Sea stretch in a line along the horizon behind a foreground of rocks
Cargo ships in the Black Sea wait to enter Ukraine’s Sulina canal. June’s record 2.3m tonnes of overland grain exports is just a third of Ukraine’s usual sea exports. Photograph: Daniel Mihăilescu/AFP/Getty Images

The agreement to move Ukraine’s grain may have been signed, but the challenge of moving millions of tonnes from blockaded Black Sea ports is only just beginning.

On Friday, Ukraine and Russia signed a UN-backed deal to allow Ukraine’s wheat, maize and oilseeds to be shipped amid fears over a global food crisis.

But finding vessels and crew available to transport these cargoes is no overnight job.

Shipping companies, as well as grain traders, have welcomed the deal as a positive step, but warned that several obstacles remain, including ensuring the safety of seafarers and vessels, along with securing adequate and affordable insurance to cover the transport.

As a first step, Ukraine’s coastal waters will need to be de-mined, or at the very least a corridor stretching several kilometres will need to be cleared. There have been mixed reports from Kyiv over how long this would take, with estimates ranging from 10 days to several months.

An armada of 400 bulk cargo ships – designed for transporting agricultural goods between continents and each able to hold up to 50,000 tonnes – would be required for transporting the estimated 20m tonnes of grain stuck in Ukraine’s stores.

Shipping analysts estimate it would take a couple of weeks for vessels to be re-routed to the Black Sea. This depends on the availability of ships in nearby areas, such as the Mediterranean, according to Peter Sand, chief analyst at freight market analytics firm Xeneta.

More than 100 ships have been unable to leave Ukraine’s ports since the start of the conflict, the majority of which are thought to be bulk cargo vessels.

However these may not be immediately able to set sail, according to Guy Platten, the secretary general of the International Chamber of Shipping.

“The ships have essentially been stopped since 24 February, so we’ve got to make sure that they’re seaworthy,” Platten said. “We’ve got to make sure the right crew are on board because a lot of the crews have been evacuated.”

About 2,000 seafarers were onboard ships anchored in Ukraine’s ports when the invasion began, and the shipping industry has worked to repatriate them over the past few months, leaving behind just a skeleton staff of about 450 crew.

It is unclear whether Ukraine would be able to provide sufficient numbers of seafarers who are not involved in the conflict to staff the grain flotilla. Before the war, Russians and Ukrainians represented around a fifth of all crew members.

Once vessels and crew have been secured, vessel owners will need to obtain adequate “war insurance” to cover ship and crew, which will undoubtedly come with higher premiums attached.

Even then, shipowners may be reluctant to send their assets and people to undertake this kind of mission, despite international guarantees.

Getting all these things in place will take time, and the clock is ticking. Ukrainian farmers are due to begin harvesting their spring crops, and space needs to be freed up inside the country’s grain silos.

During the blockade of Ukraine’s Black Sea ports, government officials and agricultural producers have been working to ramp up the levels of grain exports using road, rail and river transport.

Those exports hit a new record of 2.3m tonnes in June, according to the International Grains Council (IGC), an intergovernmental organisation that seeks to promote cooperation in the global grain trade. However, this represents just a third of the amount which was exported each month by sea before the war.

To secure sufficient space in its grain silos for the new harvest, Ukraine needs to move 7m tonnes of grain a month out of its stores over the next three months, according to the IGC.

Alexander Karavaytsev, senior economist at the IGC, said: “It may be a very challenging task to start transporting 5m tonnes in the first month after reopening. In our view, even if the ports are reopened, there will be still need for additional storage such as building new silos.”

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