Ukraine Minister for Infrastructure, Alexander Kubrakov, said 16 ships have been blockaded in Odesa since the start of the war and are awaiting their turn to sail.
“In parallel, we will receive applications for the arrival of new vessels to load agricultural products,” said Kubrakov.
JCC was set up to co-ordinate the agreement between Russia, Ukraine and the UN to facilitate the safe export of Ukraine’s large grain stocks to the world market—the Black Sea Grain Initiative. JCC comprises representatives from Ukraine, Russia, Turkey and the UN.
The shipment aboard Razoni is expected to arrive in Turkish waters for inspection on August 02, 2022, before sailing to its final destination, Tripoli.
Under the terms of Black Sea Grain Initiative, co-ordinates have been established to create a Humanitarian Maritime Corridor. The details of the corridor have been distributed and the JCC requested participants to ensure their militaries are aware of the vessel’s passage and its right to safety.
“Today Ukraine, together with partners, takes another step to prevent world hunger,” said Ukraine Minister for Infrastructure Alexander Kubrakov.
“Unlocking ports will provide at least US$1 billion in foreign exchange revenue to the economy and an opportunity for the agricultural sector to plan for next year.”
Signed on July 22, 2022, the 120-day deal allows for the export of grain from western Ukraine ports Yuzhne, Chornomorsk, and Odesa, ports which accounted for 65% of Ukraine’s total grain exports over the past five years, according to Bimco.
While the ports historically account for almost two-thirds of grain exports, volume will undoubtedly be limited by various impacts of Russia's invasion of Ukraine.
“With this deal, the UN hopes to increase monthly grain exports from Ukraine by five million tons. However, since over the past five years, these three ports have not ever handled such a high amount of grain, meeting this target could prove to be a challenge,” said Niels Rasmussen, Chief Shipping Analyst at Bimco.
“Even if port logistics accelerate to expedite exports, the need to escort ships in and out of the ports is likely to cause some congestion.”
There are also questions over whether seafarers, operators, ship owners, and insurers will be willing and able to work in the region.
Ukraine is a significant producer of grains and oilseeds, with arable land accounting for around 55% of its land area according to the US Department for Agriculture (USDA) and agriculture accounting for 41% of Ukraine’s total exports by value in 2021.
Some 22 million tons of grain are stranded in Ukraine ready for export, and a further export surplus of 25 million tons is expected from the 2022 harvest. There is an urgent need to move grain; with the wheat harvest underway and corn harvest to follow in September, stored grain needs to be exported swiftly to make room for the new crop.
“A significant obstacle to Ukrainian grain exports will be the voyage risk and corresponding insurance premiums. For the shipping of Ukrainian grain to be attractive, high rates will be necessary to mitigate risk-related expenses,” said Rasmussen. “Russia’s recent missile strikes in ports such as Odesa will add to the insecurity and uncertainty of operating in the Black Sea.”
The impact of the war in Ukraine has hit production for key agricultural exports. Usually the world’s largest producer and exporter of sunflower meal and oil, Ukraine’s sunflower meal exports are forecast to fall from almost 66% of global exports to 40%, and sunflower oil exports are forecast down from almost half of global exports to 35%.
“Due to limited global supply of wheat and maize, a return of Ukrainian grain to the global market would positively impact the Panamax, Supramax and Handysize segments. Additionally, the boost in Ukrainian exports would help combat inflation and food insecurity, particularly in emerging economies, and help bring needed stability to the global economy,” said Bimco.
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