Black Sea Grain Corridor with almost no ships as Russia’s exit looms Ship’s crew

By Megan Durisin and Aine Quinn (Bloomberg) –

Only seven harvest vessels remain in Ukraine’s harvest corridor as Russia threatens to pull out of the Grain Pact later this week, disrupting traffic.

No new incoming ships have cleared inspection through the corridor in more than a week after a disagreement arose between the parties at the Joint Coordination Center in Istanbul, which is tasked with inspecting all boats. There’s only a trickle left outbound traffic When traversing safe passage, the schedules published by the United Nations show.

The Black Sea Agreement has enabled Ukraine to transport more than 30 million tons of produce from three major ports, which helped bring down global food prices after they skyrocketed following the Russian invasion. But Moscow has repeatedly threatened to pull out of the pact, saying a parallel deal to remove obstacles to its own agricultural exports has not made sufficient progress.

Nikolay Gorbachev, President of the Grain Union of Ukraine, said that without the corridor, Ukraine would not be able to realize its full crop export potential – about 44 million tons – in the period 2023-2024.

The UN said that of the seven ships remaining in the system, one is in port, one is transiting the corridor and the rest are awaiting inspection. Chicago-traded wheat fell 0.4% on Tuesday after gaining 4.1% on Monday.

According to Dmitry Timotin of the Inzernoexport GmbH agency in Odessa, which normally organizes port calls for three ships a month, the current disruption is paralyzing deliveries.

“We don’t have any new grain contracts because everyone is waiting for information about what will happen with the grain corridor,” he said. “Our terminal is not working at the moment because there are no incoming ships.”

While Ukraine can move some volumes by river and rail via its European Union neighbors when its own ports are not operational, these flows also face problems. Five eastern EU countries have temporarily restricted imports of Ukrainian grain, allowing only transit cargo.

Timotin said he had an alternative project to ship grain through the Ismail river port, but the volumes would be much smaller.

The United Nations, which negotiated the grain deal with Turkey, said Monday talks are ongoing. According to TASS, Kremlin spokesman Dmitry Peskov said on Tuesday that many questions about the pact remain unanswered and that Russia will make an announcement as soon as a decision is made.

Despite Moscow’s complaints, Russia is expected to ship record quantities of grain this season, while its fertilizer exports surge back to pre-war levels.

© 2023 Bloomberg LP

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