Tuesday saw the departure of two more grain-carrying ships from Ukraine’s Chornomorsk port as part of an agreement to open the nation’s ports that were mediated by the UN and Turkey. With some of the world’s poorest nations, like Eritrea in Africa, as consumers, the arrangement, which has established a safe corridor, was intended to help with food shortages worldwide. However, corn, which is frequently used as animal feed or to make the biofuel ethanol, has so far made up the majority of exports. Though some problems still persist.
No shipment of wheat yet
The agreement established a secure maritime route for exports from three Ukrainian ports, and its first focus has been on clearing a path for ships that have been stranded in the war-torn nation since Russia’s incursion in February. Approximately 370,000 tonnes of agricultural products, primarily maize but also tiny amounts of soybeans, sunflower oil, and sunflower meal, have been exported thus far. Wheat has not yet been delivered in any shipments. It will probably take until mid-September to transport the estimated three million tonnes of grain that are now in ports.
But, will it alleviate the food crisis?
To make a significant difference in the world’s supplies, even higher volumes will need to be supplied. In addition to the expected additional 20 million tonnes of wheat that will be harvested this year, Ukraine has approximately 20 million tonnes of grain stockpiled throughout the nation. Three million tonnes can be sent per month through the three ports engaged in the agreement—Odesa, Chornomorsk, and Pivdennyi—and some believe this level of exports might be reached in October. However, a significant number of ships will be required to convey such a vast amount of grain, and some shipowners may be reluctant to enter a war zone due to the hazard posed by mines and the high cost of insurance.
Sea mines are a threat
The numerous naval mines that are currently floating in the Black Sea are being blamed on both Russia and Ukraine. One crew member on the first ship, the Sierra Leone-flagged Razoni, listed this as his greatest dread on Monday. They pose a serious hazard. Military diving teams from Romania, Bulgaria, and Turkey have been defusing mines that have wound up in their waters as the mines have drifted far from the coasts of Ukraine. There was not enough time before the grains deal went into effect to clear them because it could take months to do so.
Need for insurance
The long-awaited rules on the shipping route, which are intended to allay worries held by insurers and shipowners, were released on Monday by the Istanbul-based Joint Coordination Centre, which administers the agreement and is composed of Turkish, Russian, Ukrainian, and U.N. officials. Insurance companies had previously stated that they would be willing to offer coverage if plans were made for international navy escorts and a defined sea mine response plan.
Crew stuck in the conflict zone
Another issue will be finding enough sailors ready to man both ships calling at Ukrainian ports as well as ships stranded inside Ukrainian ports. Around 2,000 mariners from all over the world were trapped at Ukrainian ports at the beginning of the crisis; today, that figure is down to 450.
Can it slow down global food inflation?
By raising the cost of both grains and energy, Russia’s invasion of Ukraine has sparked an increase in food prices. Russia’s natural gas supplies to Europe have decreased, and pipeline equipment is to blame, along with Western sanctions. Leaders in the West have charged Moscow with blackmail. The cost of farming, transporting, processing, and packaging food increases when fuel prices rise. It is commonly expected that the price of grains and oilseeds will fall globally if the strategy to export grains is successful. Despite this, supplies are still scarce, and because the conflict has damaged agriculture, this year’s harvest in Ukraine will be lower than last. Even if the agreement holds, the World Food Programme has issued a warning that food prices will remain high.
(with inputs from agencies)
