Singapore : Even though the UN-backed safe passage deal for Ukrainian grain exports was successfully agreed upon and signed by Russia and Ukraine on Friday, financial information provider S&P Global Market Intelligence believes it may take a few weeks to months to resolve insurance and safety concerns for the Black Sea routes from major grain ports, including Odessa. Meanwhile, Danube River ports will likely remain a safe and attractive option for grain exports in the near term.
The agreement has in a way ended a wartime standoff that had threatened food security in several countries and cleared the way for exporting tons of Ukrainian grains. “However, even with the new additional capacity of 1-1.5 million tonnes per month from Danube River ports, total grain export capacity is still 70-80% lower than the pre-invasion level in terms of combined bulk and general cargo vessel capacity, which is still not enough to offset the loss of export capacity,” said Daejin Lee, Lead Shipping Analyst at S&P Global Market Intelligence. Ukraine shipped around 5-6 million metric tonnes of grain per month via six major grain ports in the Odessa region during the harvest season before the conflict. “In the early stage, small domestic vessels will operate through the passage first. However, to ship the grain cargo out of Ukraine efficiently, larger bulk carriers are necessary, which would likely call in after clearing insurance and safety issues,” the report said.