Vessel backlog weighs on Ukraine-Russia grain export deal in the Black Sea

Vessel backlog weighs on Ukraine-Russia grain export deal in the Black Sea

A UN-backed grain deal that saw Ukraine export millions of tonnes of wheat is under strain as a surge in cargo ships has caused a backlog aiming to cross the Black Sea.

The number of ships waiting to sail to or from Ukrainian ports hit a record 120 late last week, sparking growing frustration in Kyiv and accusations of delaying tactics by Moscow at a time when Russia is trying to repel Ukraine’s counter-offensive in the occupied territories. Regions.

The time ships have to wait for inspections at a monitoring center in Istanbul has dropped from 10 to 15 days since mid-September, according to grain research firm SovEcon, from five to six days in the past six first weeks of the agreement. . The delays have prompted calls for more inspectors to be added to meet the demand for the large number of craft using the route.

Ukraine, one of the largest wheat producers in the world, wants to export as much grain as possible to create space in its silos for newly harvested crops. He has grown increasingly worried about the backlog, according to two officials familiar with how the deal works.

“There is a bit of frustration that the Ukrainians would clearly like to export as much as possible,” said one.

Amir Abdulla, the UN official coordinating the Black Sea Grain Initiative, acknowledged that the five teams of inspectors – which include representatives from Russia, Ukraine, Turkey and the UN – were struggling to keep up with demand.

“We basically need to get all parties to agree that we need to add inspectors,” Abdulla told the Financial Times.

People familiar with the deal – which is up for renewal next month – said Russia had been reluctant to send additional inspectors to help clear the backlog. This angered Ukrainian officials.

“At the moment, there is no decision of all [monitoring centre] members to increase the number of inspections in order to avoid further congestion of ships awaiting inspection,” said Yuriy Vaskov, Ukrainian Deputy Minister of Infrastructure.

The Kremlin did not respond to a request for comment on the number of inspectors.

UN officials said the backlog was a testament to the success of the grain deal, which was signed by Ukraine and Russia in July after mediation efforts by the UN and Turkey, with up to 16 new vessels per day signed to collect shipments under the agreement.

“There are more ships coming in for this than any of us anticipated,” Abdulla said, adding that almost 7 million tonnes of grain had been exported from Ukraine since the beginning of April. august. “That’s the positive side of why we have so many ships joining us.”

The lack of preparation of some crews and shipowners has also led to some ships failing their inspections, which has increased the workload of inspectors.

Grain deal inspections slowedGM081025_22X

But the backlog comes at a very sensitive time, with the 120-day deal renewing on November 19. “Everyone is nervous and aware that great things are happening. [in the conflict] it could derail the grain deals,” said a person involved in indirect negotiations between Ukraine and Russia.

Grain traders are increasingly nervous that the deal will not be extended, with worrying implications for global food security. “If the export corridor is not renewed, [grain] the market will explode again,” said Alex Sanfeliu of agricultural trading firm Cargill.

Black Sea freight rates have risen nearly 10% over the past week, according to pricing agency Agricensus – a spike that traders have blamed on heightened risk that increased military activity could jeopardize the agreement.

“Expanding the Black Sea Grains Initiative is essential because it has benefited the world enormously by bringing wheat to developing countries at risk of famine and stabilizing world wheat prices,” said John WH Denton, Secretary General of the International Chamber of Commerce, who was involved in crafting the Grains Agreement.

As the renewal date nears, Kyiv is working to expand the deal to include a fourth port, the major grain export hub of Mykolaiv. Moscow, meanwhile, is pushing to make progress on a delayed deal to export Russian ammonia.

A person familiar with the grain deal dismissed fears it might not be renewed, arguing there were incentives for both sides to continue. “Most of us strongly believe it will be extended,” the person said.

Additional reporting by Polina Ivanova and Max Seddon

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