Shipment insurance

Ukraine makes first grain shipment since invading Russia in key milestone

Ukraine has made its first shipment of grain since the Russian invasion, marking a small but crucial first step towards unlocking the millions of tonnes of crops piling up in the country and increasing food supplies global.

The Razoni, a freighter loaded with 26,527 tonnes of maize, left for Lebanon on Monday morning, according to the United Nations, which, together with Turkey, helped broker the deal to boost exports. Ukrainian Infrastructure Minister Oleksandr Kubrakov confirmed the departure and said another 16 ships in the greater Odessa region were waiting their turn to sail.

Wheat, corn and soybean futures fell in Chicago. Ukraine is one of the largest suppliers of grain and vegetable oil and the loss of exports through its Black Sea ports has rattled food trade and raised the threat of a hunger crisis. Monday’s shipment marks a milestone under the July 22 agreement to create safe shipping lanes through three of Ukraine’s ports, though it’s unclear how quickly exports may increase.

Prevent global famine with @UN, @EU_Commission, #G7. The first ship left the port of Odessa since 24.02.2022
— Oleksandr Kubrakov (@OlKubrakov) August 1, 2022

“Ensuring that existing grains and foodstuffs can get to global markets is a humanitarian imperative,” a spokesman for UN Secretary-General Antonio Guterres said in a statement. “The Secretary-General hopes this will be the first of many commercial vessels to move under the initiative.”

Dozens of ships are stranded in ports scattered along the Black Sea and should start going out in “caravans” if all goes well. However, shipowners will have to take out insurance for cargoes and ships, and also find enough crew to sail them. A Russian attack on the seaport of Odessa with cruise missiles hours after the deal was signed earlier raised questions about its involvement.

Lloyd’s of London’s Ascot and Marsh provide insurance for Ukrainian shipping corridor

Ukraine will start transporting agricultural goods to ports this week, Kubrakov told TV. The country shipped some volumes of grain by road and rail while ports remained closed, but in volumes far below what it can export by sea. It expects to reach full capacity for transporting agricultural products within weeks, the minister wrote earlier.

The pace of exports will be important as Ukrainian farmers have warned they are running out of space to store crops, which could negatively affect the amount of grain sown for next year’s harvest.

Ukraine has also accused Russia of stealing grain from occupied areas of the country and exporting it. Lebanon has seized a ship loaded with barley and wheat flour as it determines whether the cargo may have been stolen from Ukraine, Attorney General Ghassan Oueidat said over the weekend. Grain shipments from Russian-occupied Crimea have increased since the invasion, indicating that Ukrainian grain is being exported there through sanctioned ports, analysts said. Russia denies stealing grain.

The Razoni is expected to arrive in Istanbul on Tuesday, according to the Turkish Defense Ministry. The agreement provided for monitoring by a joint coordination center in Istanbul, with representatives of all parties.

The World Food Program plans to buy, load and ship 30,000 tonnes of wheat from Ukraine on a UN-chartered vessel, with more details expected in the coming days, the UN said.

–With the help of Taylan Bilgic, Abdel Latif Wahba and Áine Quinn.

Photograph: The bulk carrier M/V Razoni, carrying a cargo of 26,000 tons of corn, leaves the Ukrainian port of Odessa, en route to Tripoli in Lebanon, August 1, 2022. Photo credit: Oleksandr Gimanov/AFP/Getty Images

Copyright 2022 Bloomberg.

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