Shipping companies are in no rush to export millions of tons of grain stuck in Ukraine, despite an agreement to provide safe corridors through the Black Sea.
That’s because with explosive mines being released into the waters, ship owners are assessing the risks and many still have questions about how the deal will ultimately unfold.
The complexities of the deal have meant a slow and cautious start, but it only has 120 days to run — and the clock started ticking last week.
The goal over the next four months is to get about 20 million tons of grain from the three Ukrainian seaports blocked since Russia’s February 24 attack. This gives time for about four to five large bulk carriers per day to transport grain from ports to millions of poor people around the world facing hunger.
It also provides enough time if things go wrong. Just hours after the signing on Friday, Russian missiles struck the Ukrainian port of Odesa – one of the ports included in the deal.
Another key element of the deal provides assurances that shipping of Russian grain and chemical fertilizers will not be caught in the wider web of Western sanctions. But the agreement brokered by Turkey and the UN is contrary to the difficult and dangerous reality that its implementation may have.
“We have to work hard to understand now the details of how this will work in practice,” said Guy Platten, secretary general of the International Chamber of Shipping, representing the national shipowners’ associations that make up around 80% of the world’s merchant marine.
“Can we guarantee the safety of the crews? What will happen to mines and mined areas? So, a lot of uncertainty and unknowns at the moment”, he said.
Extracting wheat and other food is essential for farmers in Ukraine, who are running out of storage capacity amid new harvests. These grains are vital for millions of people in Africa, parts of the Middle East and South Asia, who are already facing food shortages and, in some cases, famine.
Ukraine and Russia are the main global suppliers of wheat, barley, corn and sunflower oil in the Black Sea region, known as the “breadbasket of the world”. The war has driven up food prices, threatening political stability in developing countries and forcing some countries to freeze some food exports, exacerbating the crisis.
The agreement stipulates that Russia and Ukraine will provide “maximum guarantees” for ships that brave the journey through the Black Sea to the Ukrainian ports of Odesa, Chernomorsk and Yuzhny.
“The main danger we are facing will undoubtedly be mines”said Munro Anderson, head of intelligence and a founding partner with Dryad, the maritime security consulting company that is working with insurers and brokers to assess the risks ships could face along the route as sea mines laid by Ukraine to obstructing Russia are everywhere.
Turkey’s defense minister said on Wednesday that demining the waters was not required immediately, but that plans could be made if ordered later.
Ukrainian officials have expressed hope that exports could resume from one port within days, but they also said it could take two weeks for all three ports to become operational again. Experts in Ukraine are working on determining safe routes for ships.
Shipowners, charterers and insurance firms, meanwhile, are scrambling to figure out how the deal will work in real time.
Oleksiy Melnyk, an analyst with the Kiev-based Razumkov Center, said the security issues are largely unresolved because Russian missiles can hit warehouses that store grain and ports.
“Shipowners and insurance companies are scared, they have not received any reliable assurance of safety,” said Mr. Melnyk.
“We are seeing only words and promises, which are of little value in a time of war,” he added.
Insurance companies contacted by The Associated Press declined to comment on whether they would offer coverage for the vessels.
The war has caused major disruptions to global trade, stranding over 100 ships in multiple Ukrainian ports.
In the three ports included in the export agreement, 13 carriers and cargo ships are blocked in Chornomorsk, six in Odesa and three in Yuzhny.
Some of those ships may still have crews on board that can be mobilized to begin exporting grain.
Ukrainian traders have been able to ship some wheat across the Danube River, which helped boost exports to around 1.5 million tonnes in May and up to 2 million tonnes in June, although it is still less than half of the monthly grain shipments of 4 up to 5 million tons before the war, according to Svetlana Malysh, an analyst of agricultural markets in the Black Sea with Refinitiv.
For ships going to the three Ukrainian ports, smaller Ukrainian pilot boats will guide the ships through the approved corridors. The entire operation, including the scheduling of ships along the route, will be overseen by a Joint Coordination Center in Istanbul staffed by officials from Ukraine, Russia, Turkey and the United Nations.
Once the ships reach the port, they will be loaded with tens of thousands of tons of grain before heading back to the Bosphorus, where representatives from Ukraine, Russia, the UN and Turkey will board the ships to inspect them for weapon. Most likely, there will be inspections for ships heading to Ukraine.
Because the process is so complex and slow, it is unlikely to have a significant impact on the price of wheat worldwide./VOA
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