![Grain being loaded into a ship in the Ukrainian port city of Mykolaiv before the Russian invasion.](https://media.guim.co.uk/5bfb80bf88c2b58352f53e74d1099260d7bfbb71/0_110_3300_1980/1000.jpg)
Worries over insurance are the biggest obstacle to grain ships leaving Ukraine’s Black Sea ports this week, exporters say.
Questions remain over whether insurance companies will be willing to insure the vessels as they navigate the mined waters, while buyers are hesitant to make new orders given the risk of Russian attacks.
Russian missiles struck the main port of Odesa on Saturday, just 12 hours after Russia’s defence minister, Sergei Shoigu, signed an agreement in Istanbul guaranteeing safe passage for Ukraine’s exports. Russia later said it had targeted a Ukrainian vessel at the port carrying western weapons, but did not present evidence.
Ukraine’s infrastructure minister, Oleksandr Kubrakov, said on Monday that the first ships would leave their Black Sea ports this week, despite the attacks. Kubrakov, who signed on behalf of Kyiv, said that although Ukraine did not trust Russia, “it trusts its allies and partners, which is why the agreement … was signed with the UN and Turkey and not Russia”.
A spokesperson from the ministry said it was working to implement the plans as early as this Friday or early next week.
But the markets are sceptical. They are waiting to see what happens before putting in new orders, according to Masha Belikova, an agriculture expert at the commodity price reporting agency Fastmarkets.
“[Exporters] have been very pessimistic and are still very pessimistic about the agreement,” said Belikova. “First, and most importantly, is that [they] can’t trust Russia, so any agreement with Russia is not really seen as an agreement.”
The general priority of exporters and buyers, said Belikova, is to move the grain that is loaded on vessels that have been sitting in Ukraine’s ports since the invasion. If everything goes smoothly, said Belikova, they will then start thinking about moving what is stored at the ports.
“Maybe, then, if everything goes OK, they might think about new trades,” said Belikova, referring to new orders. “For now, they don’t think it is possible.”
Ukraine is one of the world’s biggest exporters of wheat, corn and sunflower oil. Russia’s invasion and its naval blockade of Ukraine’s ports have driven up global food prices, pushing some countries, such as Somalia, towards famine.
One of the big issues being raised by the industry is who will insure such a risky journey.
“It’s really hard to guarantee any safety for the crew, for the cargos, for the people that are working at the port,” said Belikova. “What if they decide that there is some military object – just close the terminal?”
There is talk that Turkish commercial ships may be used for future exports as the rest of the world’s ships may be more reticent of the dangers, said Tim Worledge, also of Fastmarkets.
However, Turkish ships tend to be smaller, carrying just 10,000-15,000 tons, whereas the type of ships that previously operated from Ukraine tended to carry 40,000-70,000 tons of cargo, said Worledge.
For the last five months, Ukraine has been using the shallow-water ports along the Danube, which borders Ukraine and Romania, and Ukrainian rail has been working to increase rail exports into Europe.
Ukraine now exports up to about 2m tons of grain and meal a month through these channels, said Belikova. Before the war, the total was between 6m and 8m tons a month.
Russia’s invasion and approach to negotiations, including its attack last Saturday, has caused buyers to think about diversifying their supplies, said Worledge.
Ukraine’s infrastructure minister said the exports would start from Chornomorsk port, the closest port to Ukraine’s Romanian border. Belikova said that, according to shipping data, there were at least 10 vessels that had been stuck in the port since 24 February, which amounts to more than 600,000 tons.