Black Sea agri-bulk exports fall 35% in April 2022 due to Ukraine war

Assessing the impact of the conflict on exports S&P Global Market Intelligence said total seaborne agri-bulk shipments from the Black Sea region in April fell 35% year-on-year to 4million tons.

Shipments of corn and barley from the Black Sea area were hard hit, down 76% to 891,000 tons, and down 82% to 65,000 tons respectively. However, wheat shipments were reported to be up 44% at 3million tons.

S&P noted that Black Sea agri-bulk shipments declined to almost all import regions and territories in April including North Africa, Middle East, Northwestern Europe, Japan, Korea, Taiwan, mainland China, Southeast Asia and West Africa. The only region to see a rise in shipments was the Mediterranean, with an increase in agri-bulk exports from the Black Sea region of 15% to 1.2m tons

A report issued this week by insurers Allianz Global Corporate & Specialty (AGCS) highlighted that the biggest impact of the war on shipping so far had been on vessels trading to the Black Sea and Russia, with Ukraine’s major ports, including Odessa closed by a Russian blockade. The insurer noted that Ukraine moves 70% of its exports by sea and some 99% of its grain exports are moved by ship.

With the war in Ukraine increasingly looking to be a drawn out conflict there could be further negative impact on agri-bulk exports.

Pranay Shukla, Associate Director at S&P Global Market Intelligence said, “There could also be further significant downside risks to the Black Sea agri-bulk forecast for this year depending on how long the war extends and if Ukraine can manage its exports from Romania and Poland, while upside risks could arise from Russian wheat exports on expected strong domestic wheat harvest.”

S&P currently forecasts that agri-bulk shipments from the Black Sea region will decline 37% year-on-year to 11.2, tons in the second quarter of 2022, and by 20%YoY to 83.9 million tons for the full year in 2022.

“The insurance industry is likely to see a number of claims under specialist war policies from vessels damaged or lost to sea mines, rocket attacks and bombings in conflict zones,” explained Justus Heinrich, Global Product Leader, Marine Hull, at AGCS. Insurers may also receive claims under marine war policies from vessels and cargo blocked or trapped in Ukrainian ports and coastal waters.