When the Razoni left Odessa earlier this month, the first ship to leave Ukraine with a cargo of food since Russia’s full-scale invasion was hailed by UN Secretary-General António Guterres. as carrying two commodities in short supply – “corn, and hope”.
But the world’s most closely guarded ship has since proven itself a flawed symbol of the path to solving the global food crisis.
After sailing through mines in and around Ukrainian Black Sea ports, the Razoni never arrived at its originally stated destination, Tripoli in Lebanon. The cargo buyer rejected the 26,500 tonne maize cargo for quality reasons and the vessel remained stuck until new buyers were found and 1,500 tonnes of grain were unloaded in Turkey.
En route to its next declared destination of Egypt, the ship on Friday stopped transmitting from its transponder, which broadcasts position and route information, with its last signal sent earlier in the morning from the coast northwest Cyprus and its later location uncertain.
The Razoni’s journey shed light on the complex and secretive nature of commodity trading and the layers of intermediaries, agents and insurers involved.
“[Grain trading] is very complicated. The UN relies too heavily on the private sector in a very half-baked initiative,” said Jean-Francois Lambert, a consultant and former commodity trading banker.
As part of a deal brokered by the UN and Turkey last month, Kyiv and Moscow agreed to open a humanitarian corridor allowing the passage of cargo ships carrying Ukrainian grain, stranded in the country’s ports due to the war, across the Black Sea to Istanbul. The two countries have agreed not to attack ships or ports covered by the 120-day initiative, with the UN hoping grain exports will reach around 2-5 million tonnes per month once the operation gets under way.
The UN-led Joint Committee (JCC) overseeing the deal said the Razoni was chosen as the first ship based on information provided by Ukrainian port authorities, including its readiness to sail.
The vessel is known in the shipping industry for being one of those that regularly travels between the riskiest ports in the Mediterranean, for example in countries affected by conflict.
“These are difficult places,” said Yörük Işık, an Istanbul-based geopolitical and maritime analyst. “Vessels that work in the region tend to have more adventurous crews. The Razoni is a ship that works between the most difficult routes.
Its corn cargo was initially sold by an Austrian commodity trader, VA Intertrading, first rated by price survey agency Agricensus. Under an agreement commonly known as “free on board,” the company said it loaded the corn onto the Razoni, which was chartered by the unidentified buyer, in February.
The buyer, believed to be Lebanese, has now sold the grain. Changing final destination and buyer during the journey was “a fairly common business process”, the JCC said.
Ukraine’s agriculture ministry said all grain shipped from the country had passed quality inspections in accordance with international standards and dismissed suggestions that its grains held in ports since the outbreak of the war were rotten. Other than the original buyer’s rejection of Razoni’s shipment, “so far there have been no negative reviews,” he said.
While the identity of the buyer of the Razoni cargo remains a mystery, the ship itself is also an enigma even within the grain trading community.
Sailing under a Sierra Leonean flag, a practice known as a “flag of convenience” where an owner registers a vessel in a country other than their own, the vessel is owned by Razoni Shipping Ltd, according to databases from the industry. However, his contact details are not available and the FT was unable to reach the company or the ship’s crew. The ship’s agent in Turkey said the captain and most of the crew were Syrians.
Operating primarily in the Black Sea and Mediterranean region, the ship made three trips last year where its transponders were turned off. After some time, they were turned back near Cyprus, according to data from the Sea/ marine platform.
Photos from Planet Labs, a satellite photography platform, appear to show the Razoni calling at Syrian ports during periods of darkness. Trade in grain and food with Syria does not contravene Western sanctions imposed on the regime in Damascus during the country’s long civil war. But some vessels openly avoid sailing to the country due to stipulations by financial institutions, according to grain traders.
Questions have also been raised about the Razoni’s insurance. It has no entry into vessel research provided by the International Group of P&I Clubs, a group of 13 mutually owned insurers that provide liability cover for around 90% of the world’s ocean tonnage. The list shows which vessel is covered by which insurer and is regularly updated, according to a person familiar with the matter. Many ports will not allow ships to enter if they do not have liability coverage.
Earlier this week, Frederick Kenney, acting UN coordinator at the JCC, said the organization was not responsible for verifying vessel ownership. “We don’t serve as a port state control authority,” he said, adding that it was a role for the flag state of the ship and the countries in which the ports were located.
The JCC says its role is to ensure the safe passage of ships carrying Ukrainian food exports between the grain corridor and Istanbul and to check whether the ships had unauthorized crew or cargo.
“We are not involved in food inspection, that is not part of the deal,” an official said. “We do not monitor where the ship goes when it leaves Istanbul and its destination may change depending on business activity which we do not control.”
The UN’s goal is to ease the global food crisis by lowering prices through increased supplies from Ukraine. The country is the world’s fifth largest exporter of wheat and one of the main suppliers of corn and sunflower oil. It accounts for 80% of Lebanon’s wheat imports and is one of the main suppliers to countries in Africa and the Middle East.
Grain prices, including corn and wheat, have now fallen to pre-war levels, partly in anticipation of increased supplies from Ukraine.
So far, 12 ships, including the Razoni, have left the three Black Sea ports designated under the deal – Odessa, Chornomorsk and Pivdennyi – carrying more than 375,000 tonnes of foodstuffs, mainly maize. The priority is “to free up space in Ukrainian ports and to freeze all these ships there for the past few months to leave Ukraine with cargo, so [they] can bring in new ships,” the UN official said.
Despite the issues with Razoni’s trip, commodity traders using the grain corridor remain optimistic. “It’s a learning curve for everyone. Things will get better with time. The Razoni has been a leader in exiting the corridor,” said Gaurav Srivastava, president of trader Harvest Commodities, which transported corn out of Ukraine on the Riva Wind vessel earlier this week.
Many shipowners are said to be reluctant to send ships back to Ukraine, fearing that the war will leave them trapped again. But Srivastava said he would continue to do so.
“This is potentially the first step towards some kind of peace. As a foreigner, that is hope,” he said. “It gives us perspective as a business and this business will return to normal.”
Additional reporting by Ian Smith, Harry Dempsey and Chris Cook in London, Raya Jalabi in Beirut and Ayla Jean Yackley in Istanbul