Ukraine’s Efforts to Export Grain Amid Russian Attacks Spark Interest Despite Risks

Amidst the backdrop of Russian attacks targeting Ukrainian ports critical for grain exports, Ukraine remains determined to keep its grain trade flowing. Russia’s repeated missile and drone strikes on key ports in the Black Sea have prompted Moscow to declare vast sea areas unsafe for shipping, raising concerns among ship owners about potential risks. Even the United States has expressed apprehension, warning that ships in the region are at risk of being targeted.

Despite these challenges, there is still interest from ship owners to transport Ukrainian grain through the Black Sea, albeit with careful risk mitigation measures, according to a major shipping group. John Stawpert, the senior manager of environment and trade at the International Chamber of Shipping, representing 80% of the world’s commercial fleet, mentioned that shipping has historically demonstrated resilience in the face of such risks.

The recent missile strikes occurred after Russia withdrew from a wartime accord brokered by the U.N. and Turkey, aimed at safeguarding shipping companies and addressing a global food crisis. As a significant supplier of wheat, barley, and vegetable oil to developing nations, Ukraine’s grain exports have been crucial in supporting humanitarian aid efforts. However, with the collapse of the grain deal, Ukraine took steps to establish its own temporary shipping corridor, offering guarantees of compensation for potential damages.

In response, Russia warned that vessels traversing parts of the Black Sea could be considered carrying weapons to Ukraine, triggering a retaliatory statement from Ukraine, labeling vessels heading to Russian Black Sea ports as potentially carrying military cargo. The situation has raised concerns about the safety of ship crews and vessels. The shipping industry faces considerable challenges in obtaining insurance for potential damage, injuries, and loss of life during the transportation process.

The risks for ships navigating the Black Sea include explosive mines, collateral damage at ports, or being directly targeted, with potential grave consequences. Industry experts emphasize the significance of threat assessments before sailing, considering the heightened risks of piracy, terrorism, and war zones.

The International Union of Marine Insurance, representing marine insurers globally, believes that underwriters may be reluctant to cover the increased risks associated with the region. Without the protections provided by the now-defunct grain deal, safety conditions for ship crews cannot be fully guaranteed.

To mitigate the risks, the International Group of P&I Clubs, comprising 12 providers offering liability coverage for around 90% of the world’s cargo shipped by sea, is viewed as a potential source for insurance. However, without assurances from the U.N. or other authoritative bodies, P&I clubs may be cautious in insuring the shipments.

The potential dangers posed by the ongoing conflict in the region have raised questions about whether it is too risky to expect sailors to navigate to Ukrainian ports. The focus should be on ensuring the safety and well-being of seafarers rather than on insurance matters.

With the possibility of disruptions to the Black Sea shipping routes, some analysts anticipate that most of Ukraine’s grain will be transported by road, rail, and river through Europe, resulting in higher transportation costs and potentially lower production by Ukrainian farmers.

Ukrainian Foreign Minister Dmytro Kuleba emphasizes that the best way to export grain is through the Black Sea, as it has been the primary route for 75% of the country’s grain before the conflict. However, five European Union countries—Poland, Slovakia, Hungary, Romania, and Bulgaria—have expressed their intention to extend a ban on Ukrainian grain imports, citing market flooding and reduced prices for their farmers. This move has created divisions within the EU and may impact the flow of Ukrainian grain to world markets.

The situation poses additional challenges for developing countries already grappling with high food prices, leading to increased food insecurity. Wheat prices have surged by approximately 17% in the past week, exacerbating hunger concerns among vulnerable populations.

In conclusion, Ukraine’s determination to continue exporting grain despite Russian attacks has garnered interest from ship owners, but significant risks and challenges persist. The shipping industry is navigating uncertainties related to insurance coverage, safety assessments, and geopolitical tensions, all of which could impact global food security and international trade dynamics.

Frequently Asked Questions (FAQs) about Ukraine grain exports

More about Ukraine grain exports

• Reuters – Ukraine wants ships to keep exporting its grain despite Russian attacks
• Bloomberg – Russia’s repeated missile strikes on Ukrainian ports
• Voice of America – U.S. warning about risks for ships in the region
• The Maritime Executive – International Chamber of Shipping’s view on shipping resilience
• Ukrinform – Ukraine’s role as a major supplier of wheat, barley, and vegetable oil
• The Washington Post – Russia warning about ships potentially carrying weapons to Ukraine
• International Union of Marine Insurance – Underwriters’ perspective on covering risk in the Black Sea
• Rabobank – Impact on grain trade and divisions in the European Union