Shipments from Ukraine slowing as Black Sea grain deal deadline nears

Dampskibsselskabet Norden A/S

05/05/2023 11:27

By Jonathan Saul
       LONDON, May 5 (Reuters) - The pace of shipments from
Ukraine under a U.N.-backed initiative has slowed as concerns
grow over ships getting stuck if a deal is not renewed later
this month, according to sources and data.    
    Russia, which is one of the key parties involved, said it
will keep talking although Moscow has threatened to quit on May
18, which has created more uncertainty for traders and shipping
companies trying to plan ahead.
    Under the accord, Ukraine has been able to export some 29.5
million tonnes of agricultural products, including 14.9 million
tonnes of corn and 8.1 million tonnes of wheat.
    However, the number of ships coming in to pick up cargoes
has dropped this week to two vessels a day from three to four
ships on average daily in the past three weeks, data from the
agreement's joint coordination centre showed.
    Danish shipping group NORDEN, which is active in
transporting grains, is among companies not sending ships into
the region. 
    "We are not participating in that trade at the moment ...   
It is a risky area - it is very hard to predict what will
happen," NORDEN’s Chief Executive Jan Rindbo told Reuters.
    "Things can change quickly ... from the time you agree to go
in and pick up a cargo and until the time the ship actually
arrives."
    Every shipment takes on average at least nine days currently
and involves sailing into one of three Ukrainian ports involved
in the pact and undergoing required inspections.   
    Analysis from maritime and commodities data platform Shipfix
showed the number of cargo orders – global requests for
available ships to transport grains from Ukraine – fell to 355
in April from 489 orders sent to the market in March.
    There were currently 107 forward grain orders for ships in
the market with 94 for May and only a few orders for the forward
months ahead, Shipfix data showed. 
    There are between 40 to 60 commercial ships still stuck in
all of Ukraine's ports that have been unable to leave due to
tight restrictions on what vessels are allowed to leave the
corridor, which has added worries over more assets getting held
up if no agreement is reached. 
    Insurance for ships going in has been vital, and the
war-cover policies need to be renewed every seven days, costing
thousands of dollars. 
    Rates have remained stable around 1% of the value of a ship
for weeks, according to market estimates. 
    Insurance industry sources say that for now there is no
change in cover arrangements although conditions could alter
quickly.  
    "We would expect a significant re-addressing of what is
currently charged and the way it’s underwritten if the grain
corridor agreement is not extended and if there is an escalation
of the conflict," one industry source said.  
    "Uncertainty is not good for anyone."
     

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Where does the cargo from the Black Sea Grain deal go?    https://tmsnrt.rs/40UVPrJ
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 (Reporting by Jonathan Saul, editing by Nigel Hunt and Susan
Fenton)
 ((jonathan.saul@thomsonreuters.com; + 44 207 542 4357 ; Reuters
Messaging: jonathan.saul.thomsonreuters.com@reuters.net))