Ukraine grain deal clears one of many hurdles to get supplies to market

The agreement to move Ukraine’s grain may have been signed, but the challenge of moving millions of tonnes from blockaded Black Sea ports is only just beginning.

On Friday, Ukraine and Russia agreed to a UN-backed deal to allow Ukraine’s wheat, maize and oilseeds to be shipped amid fears over a global food crisis.

But finding vessels and crew available to transport these cargoes is no overnight job.

Shipping companies, as well as grain traders, have welcomed the deal as a positive step, but warned that several obstacles remain, including ensuring the safety of seafarers and vessels, along with securing adequate and affordable insurance to cover the transport.

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[ Russia and Ukraine sign deals to end blockade of grain exports from Black Sea ports ]

As a first step, Ukraine’s coastal waters will need to be de-mined, or at the very least a corridor stretching several kilometres will need to be cleared. There have been mixed reports from Kyiv over how long this would take, with estimates ranging from 10 days to several months.

An armada of 400 bulk cargo ships — designed for transporting agricultural goods between continents and each able to hold up to 50,000 tonnes — would be required for transporting the estimated 20 million tonnes of grain stuck in Ukraine’s stores.

Shipping analysts estimate it would take a couple of weeks for vessels to be rerouted to the Black Sea.

More than 100 ships have been unable to leave Ukraine’s ports since the start of the conflict, the majority of which are thought to be bulk cargo vessels.

However, these may not be immediately able to set sail, according to Guy Platten, the secretary general of the International Chamber of Shipping.

“The ships have essentially been stopped since February 24th, so we’ve got to make sure that they’re seaworthy,” Platten said. “We’ve got to make sure the right crew are on board because a lot of the crews have been evacuated.”

About 2,000 seafarers were on board ships anchored in Ukraine’s ports when the invasion began, and the shipping industry has worked to repatriate them over the past few months, leaving behind just a skeleton staff of about 450 crew.

It is unclear whether Ukraine would be able to provide sufficient numbers of seafarers who are not involved in the conflict to staff the grain flotilla. Before the war, Russians and Ukrainians represented around a fifth of all crew members.

Once vessels and crew have been secured, vessel owners will need to obtain adequate “war insurance” to cover ship and crew, which will undoubtedly come with higher premiums attached.

Even then, shipowners may be reluctant to send their assets and people to undertake this kind of mission, despite international guarantees.

Getting all these things in place will take time, and the clock is ticking. Ukrainian farmers are due to begin harvesting their spring crops, and space needs to be freed up inside the country’s grain silos.

During the blockade, government officials and agricultural producers have been working to ramp up the levels of grain exports using road, rail and river transport.

Those exports hit a new record of 2.3 million tonnes in June, according to the International Grains Council (IGC), an intergovernmental organisation that seeks to promote co-operation in the global grain trade. However, this represents just a third of the amount which was exported each month by sea before the war.

To secure sufficient space in its grain silos for the new harvest, Ukraine needs to move seven million tonnes of grain a month out of its stores over the next three months, according to the IGC. — Guardian