Ukraine’s first shipments of grain since being invaded by Russia are a harbinger of relief for squeezed global markets, but many challenges remain before the millions of tonnes of food stuck in the country can be released.
Perhaps the biggest is the willingness of shipowners to send their vessels into harm’s way, as the waters are littered with mines and Russia did not hesitate to strike the port of Odesa after the safe-passage agreement was signed.
Officials with knowledge of the insurance market quoted a wide range of figures for covering the nation’s cargoes, with most of the numbers looking prohibitive for the trade.
“Insurance costs should be very high, and without any government assistance it will be difficult to find,” said Benoit Fayaud, an analyst with Strategie Grains in France. “It can be an issue for exports to accelerate.”
The trickle of activity started with the Razoni, which headed for Lebanon at the beginning of the week with more than 24,000 tonnes of corn.
Three more boats on Friday sailed from Ukraine’s Black Sea ports, and two ships were heading to the Port of Chornomorsk port from Turkey to pick up cargo.
Together that would make about 77,000 tonnes of exports in a week — a symbolic start, but less than 8 percent of what Ukraine usually ships at this time of year. Some quantities also are being exported by road and rail, but in much smaller volumes than can be traded by sea.
Prices for wheat and corn soared after the invasion, exacerbating food shortages for countries such as Somalia that rely on Ukraine growers.
Vasilis Mouyis, joint founder of Athens-based Doric Shipbrokers, said he has fielded inquiries this week about shipping grain from Ukraine to destinations such as Egypt, Turkey, China, Spain and Italy.
“People are putting out feelers to see if they can put things together,” he said. “Things will start gaining pace next week.”
Insurers are offering nonbinding policies to shipowners with war risk rates anywhere from 1 to 5 percent of the ship’s hull value, people involved in the market said. In less risky areas, such cover is often just a small fraction of 1 percent.
‧ Gold for December delivery fell US$15.70 to US$1,791.20 an ounce, up 1.63 percent from a week earlier.
‧ Silver for September delivery fell US$0.28 to US$19.84 an ounce, falling 1.78 percent weekly, and September copper rose US$0.07 to US$3.55 a pound, falling 0.56 percent from a week earlier.
Additional reporting by AP
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