Home / Shipping News / International Shipping News / Despite Ukraine-Russia grain export deal signed, insurance and safety concerns would delay full recovery of shipments from Ukrainian ports

Despite Ukraine-Russia grain export deal signed, insurance and safety concerns would delay full recovery of shipments from Ukrainian ports

Even though the U.N.-backed safe passage deal for Ukrainian grain exports was successfully agreed and signed by Russia and Ukraine on Friday, we believe it may take a few weeks to months to resolve insurance and safety concerns for the Black Sea routes from major grain ports, including Odessa. Therefore, Danube River ports will likely remain a safe and attractive option for grain exports in the near term.

However, according to Mr. Daejin Lee, Lead Shipping Analyst at S&P Global Market Intelligence, even with the new additional capacity of 1–1.5 million tonnes per month from Danube River ports, total grain export capacity is still 70–80% lower than pre-invasion level in terms of combined bulk and general cargo vessel capacity, which is still not enough to offset the loss of export capacity. Ukraine typically shipped around 5–6 million metric tons (MMt) of grain per month via six major grain ports in the Odessa region during the harvest season before the conflict.

In the early stage, small domestic vessels will operate through the passage first. However, to ship the grain cargo out of Ukraine efficiently, larger bulk carriers are necessary, which would likely call in after clearing insurance and safety issues. Therefore, the food inflation risk with global grain shortage is expected to continue in the near term until the passage from the major grain seaports in Odessa region fully return to normal.
Source: S&P Global Market Intelligence

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping