Grains deal removes one of many obstacles to getting Ukrainian crops to market | Ukraine

The deal to transport grain from Ukraine may have been signed, but the challenge of moving millions of tonnes from blocked Black Sea ports has only just begun.

On Friday, Ukraine and Russia signed a UN-backed deal to allow the shipment of Ukrainian wheat, corn and oilseeds amid fears of a global food crisis.

But finding ships and crews available to transport these cargoes is not an overnight job.

Shipping companies, as well as grain traders, hailed the deal as a positive step, but warned that several hurdles remain, including ensuring the safety of seafarers and vessels, as well as securing adequate insurance and affordable to cover transportation.

As a first step, the coastal waters of Ukraine will have to be cleared or, at the very least, a corridor of several kilometers will have to be cleared. There were mixed reports from Kyiv on how long it would take, with estimates ranging from 10 days to several months.

An armada of 400 bulk carriers – designed to transport agricultural products between continents and each capable of carrying up to 50,000 tonnes – would be needed to transport the approximately 20 million tonnes of grain stuck in Ukrainian stores.

Maritime analysts estimate that it would take a few weeks for ships to be redirected to the Black Sea. It depends on the availability of ships in nearby areas, such as the Mediterranean, according to Peter Sand, chief analyst at freight market analysis firm Xeneta.

A map of Ukraine’s shipping routes for grain export

More than 100 ships have been unable to leave Ukrainian ports since the start of the conflict, the majority of which are believed to be bulk carriers.

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

“The ships have basically been shut down since Feb. 24, so we need to make sure they’re seaworthy,” Platten said. “We need to make sure the right crew is on board as a lot of crew have been evacuated.”

About 2,000 sailors were on board ships anchored in Ukrainian ports when the invasion began, and the shipping industry has scrambled to repatriate them in recent months, leaving behind only a skeleton crew of approximately 450 crew members.

It is unclear whether Ukraine would be able to provide enough sailors who are not involved in the conflict to equip the grain flotilla. Before the war, Russians and Ukrainians made up about a fifth of all crew members.

Once ships and crew are secured, shipowners will need to obtain adequate ‘war insurance’ to cover the ship and crew, which will undoubtedly result in higher premiums.

Even then, shipowners may be reluctant to send their resources and men to undertake this type of mission, despite international guarantees.

Putting all of these things in place will take time and time is running out. Ukrainian farmers need to start harvesting their spring crops and space needs to be freed up inside the country’s grain silos.

During the blockade of Ukrainian Black Sea ports, government officials and agricultural producers worked to increase grain export levels using road, rail and river transport.

These exports reached a new record of 2.3 million tonnes in June, according to the International Grains Council (IGC), an intergovernmental organization that seeks to promote cooperation in world grain trade. However, this is only a third of the amount that was exported each month by sea before the war.

To ensure enough space in its grain silos for the new harvest, Ukraine needs to release 7 million tonnes of grain per month from its stores over the next three months, according to the IGC.

Alexander Karavaytsev, Senior Economist at the IGC, said: “It can be very difficult to start transporting 5 million tonnes in the first month after reopening. In our opinion, even if the ports are reopened, there will always be a need for additional storage, such as the construction of new silos. »

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