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Ukraine warns grain exports will take ‘months’ to reach prewar levels

Ukraine’s infrastructure minister warned it would take months for grain exports from Odessa and nearby ports to reach pre-war levels and ease the global food crisis despite the easing of the Russian blockade of the Black Sea.

speaking after the Departure on Monday of a ship carrying corn from Odessa to Lebanon – the first as part of a deal between Russia and Ukraine brokered by the United Nations last month – Oleksandr Kuberkov said that he expects no more than five ships to leave Odessa, Chornomorsk and Pivdni in the next two weeks.

Last August, 194 ships carrying grain left Ukrainian ports, including now-Russian-controlled Mariupol, according to London-based shipping agent Bremer. Odesa, Chornomorsk and Pivdni previously handled about 60% of all Ukrainian grain exports.

“The first two weeks will be a flight regime, when we will have one, two, three vessels outside, and then we will receive the first vessels, one, two, three that come in,” Kuberkov said in an interview.

“At one to half past one [months]I hope that if everything goes according to plan, the market will see that this mechanism works, that there is insurance, that it is cheaper and that it will simplify the whole process.”

At least 16 ships are trapped in Ukrainian ports with supplies and crew Waiting for the authorities to check Safe passage through sea mines – laid by both Russia and Ukraine – and the threat of Russian missiles. Moscow has pledged not to target ships carrying food if it can carry out joint inspections to ensure the returning vessels do not contain weapons.

The prices of wheat, corn and vegetable oils soared following that of Russia Invasion of Ukraine in February. But the prospect of the reopening of the Black Sea Corridor, along with fears of a global recession and record harvests in Russia, have recently pushed up agricultural commodity prices.

Chicago wheat, the international benchmark, fell below $8 a bushel, or levels that preceded Moscow’s invasion. Corn has lost nearly 30 percent from its April peak.

However, many vulnerable countries that rely on Ukrainian grain are facing acute food insecurity. Ukraine accounts for 80% of Lebanon’s wheat imports and is a major supplier to countries including Somalia, Syria and Libya.

Moving the 20-25 million tons of grain seized in Ukraine would require at least 371 loadings of medium-sized vessels that can carry 40,000-69,000 deadweight tons — or nearly twice as many smaller “handy-sized” vessels like the Razoni, which were scheduled to sail Monday, according to Bremer .

Kuberkov said he hoped some safe passages would allow the “free markets” to come in and increase the pace of exports.

Line chart of CBOT wheat ($ per bushel) showing wheat prices have returned to pre-war levels

A UN official said the commercial shipping world was “waiting to see” how the initial voyages went. “That’s why this trial ship is so important: to build trust, to show that ships can come in and out safely,” she said.

Chris McGill, head of marine cargo underwriting at insurer Ascot, said he was “concerned about the accuracy of the safety corridors” because the tide in the Black Sea could move the mines.

Allowing stranded ships to leave is also essential to create space in Ukraine’s ports for the vessels to arrive, the UN official said. “The ambition here is to get the ships out, bring in new ships and have regular traffic.”

The complicated logistics of navigating the Black Sea and the Bosphorus to sub-Saharan ports, which tend not to be very deep, means that a large number of smaller vessels will be required to transport the trapped grain, raising the prospect of long queues while the vessels are inspected.

Intercargo, the trade group for dry bulk ship owners, said the industry needed more certainty that merchant ships would not be bombed. Ship owners will also not send their vessels to ports if the situation remains volatile.

“I understand that no one can give guarantees,” Kuberkov said, pointing to this Odessa was hit by Russian rockets just a week ago “We hope this will not happen again, but such attacks could create problems for the future.”

Ukraine warns grain exports will take ‘months’ to reach prewar levels Source link Ukraine warns grain exports will take ‘months’ to reach prewar levels

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