Blog News Events Publications Directory Community Industry Voices Media

Ukraine grain exports face vessel backlog as concerns grow over Black Sea initiative

Authorities responsible for the safe export of Ukrainian grain from Black Sea ports are working to clear a backlog of vessels awaiting inspection, as concerns grow over whether the initiative will be renewed next month. 

The Black Sea Grain Initiative has been hailed as a “beacon of hope” for food security since its launch in August, after Russia’s blockade of Ukrainian ports left millions of tonnes of wheat, corn, sunflower products and other goods stuck in siloes. 

But this week, the Joint Coordination Centre (JCC), which comprises representatives from Russia, Turkey, Ukraine and the UN, announced there is now a backlog of 113 vessels awaiting inspection in Turkish waters, plus another 60 waiting to join the initiative. 

AdvertisingFendahl CTRM Technology
AdvertisingION Commodities

“The JCC is concerned that the delays may cause disruption in the supply chain and port operations. Over the last few days, the JCC has started registering again new vessels to join the initiative,” it says. 

“The JCC regrets inconveniences caused to the shipping and trading industry. It reaffirms its commitment to enable the safe and timely navigation for exports under the Initiative.” 

With the next harvest approaching, representatives warn that Ukrainian grain silos are set to fill up again, and are discussing ways to clear the backlog including by upping the number of inspection staff to five. 

The council is also working to make operational procedures more efficient, such as easing the submission of paperwork and making the approval process smoother. 

97 of the vessels awaiting clearance are currently loaded with 2.1 million tonnes of cargo, while the capacity of inbound vessels is estimated at 1.9 million tonnes.  

“This is much-needed grain and food products that will help further address global food insecurity,” the JCC says. 

As of October 25, there have been a total of 427 shipments under the initiative, carrying nearly 8.7 million tonnes of cargo. 

The UN Conference on Trade and Development (UNCTAD) says in a report published last week that “large shipments of grain are reaching world markets” thanks to the agreement, resulting in food prices becoming lower and more predictable after a period of rampant inflation and price volatility. 

However, the UNCTAD report calls for the initiative to be renewed by all parties involved before it expires on November 20. Renewal is currently “uncertain”, it says, meaning “the price of some commodities, such as wheat and maize, is rising again”.  

“Without the initiative, there is little hope for providing food security, especially for developing and least developed countries,” it says. 

There are growing concerns that Russia will refuse to continue allowing exports of Ukrainian grain via the Black Sea. 

Russian President Vladimir Putin previously criticised the initiative on the grounds that “practically all the grain exported from Ukraine is sent not to the poorest developing countries” but to the EU and Turkey. 

So far, 187 shipments have been to EU member states and the UK, and another 129 to Turkey, equivalent to around three-quarters of the total. 

But US officials have argued that the strength of the programme so far has been to reassure Ukrainian producers that there is a potential buyer – the UN World Food Programme – for crops they produce, and so planting should continue. 

Ukraine’s Infrastructure Ministry issued a statement on October 23 accusing Russia of “deliberately blocking the full realisation” of the initiative. “As a result, these ports in the last few days are working only at 25-30% of their capacity,” it said. 

The post Ukraine grain exports face vessel backlog as concerns grow over Black Sea initiative appeared first on Global Trade Review (GTR).

Go to the Source – Ukraine grain exports face vessel backlog as concerns grow over Black Sea initiative

Complexity in cocoa trading systems

Published 23 November 2022