Ukraine Sees Path to Surging Grain Exports After First Shipment

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KYIV, Ukraine—Ukraine said its first grain shipment since the start of Russia’s invasion had been a success and could lead to a surge in exports to prewar levels within two months, but industry players warned that sizable hurdles remain.

Oleksandr Kubrakov,

Ukraine’s infrastructure minister, said 17 vessels loaded with grain were ready to depart the three Ukrainian Black Sea ports operating under a deal agreed upon last month. He said two or three ships will soon begin leaving daily, with a view to traffic ultimately reaching 100 outgoing vessels each month.

Mr. Kubrakov said Ukraine could return to exports of 3 million metric tons of grain a month by mid-to-late September, bringing about $1 billion into an economy decimated by Russia’s invasion.

Ukraine’s first grain shipment since Russia’s invasion passed inspection in Turkey under an internationally brokered deal, which is expected to release large stores of crops that have been trapped in the country and ease global food shortages. Photo: Turkish Defense Ministry/AFP via Getty Images

Getting grain shipments flowing again from Ukraine, one of the world’s largest grain producers, is critical to alleviating global food shortages and bolstering the country’s finances.

Ukrainian farmers, grain traders and shipping companies have all cheered the first shipment, which is expected to arrive at a port in Lebanon within days, but few expect a return to normality soon.

It couldn’t be determined how many shipping companies are prepared to take the risk of going into Ukrainian ports while the war continues, and whether insurance for such trips will prove prohibitive.

Ukraine had a backlog of 16 million metric tons of grain in storage from before the invasion, and a further 13 million metric tons of barley and wheat have been harvested so far this summer, according to Ukraine’s Ministry of Agrarian Policy and Food.

The voyage of the Razoni, a Sierra Leone-flagged bulk carrier carrying 26,000 metric tons of grain, was the first test in the United Nations-brokered deal reached last month between Ukraine and Russia. It is expected to arrive in Lebanon after undergoing an inspection in Istanbul overseen by representatives from Russia, Ukraine, Turkey and the U.N., Mr. Kubrakov said.

While the start of shipments is promising for Ukrainian farmers and the country’s mainly developing-world buyers, the flow of corn, wheat and barley will still be lower than before the war. It will take months to clear the backlog of grain, and this season’s harvests are already coming into overcrowded storage, even if the new crop is expected to be depleted by the war. The U.S. Agriculture Department predicts Ukraine will export 30.6 million metric tons of grains and seeds over the 2022-23 season, almost half the tonnage of the season before.

Mr. Kubrakov pointed to comments by Ukrainian President

Volodymyr Zelensky,

who on Wednesday played down the significance of the first shipment and described it as merely a fraction of what Kyiv must sell to boost its shattered economy.

Ukrainian President Volodymyr Zelensky and Oleksandr Kubrakov, Ukraine’s infrastructure minister, visited the port of Chornomorsk, Ukraine, last month.



Photo:

str/Agence France-Presse/Getty Images

“The idea is just to prove that this initiative can work for now—this was important,” Mr. Kubrakov said.

Traders and shipping firms have been following the Razoni’s voyage closely as a trial run that could make other shipments possible.

Gaurav Srivastava,

chairman of Harvest Commodities SA, is awaiting the green light for his cargo of 50,000 metric tons of feed corn, currently aboard a ship in Odessa, to set sail.

The corn was loaded onto the ship in February, before Russia’s invasion trapped it there. The ship has been inspected in accordance with the deal, but delays have been encountered obtaining new phytosanitary documents for the cargo, he said.

Mr. Srivastava, who has tried to export grain across Ukraine’s overloaded overland routes, hopes to send fresh vessels to Ukrainian ports to ship more grain if the passage of this first cargo proves successful.

“The goal is that we will be able to send more ships to pick up these grain shipments. The issue is that there are very few ships that are willing to go into those territories and the insurance is fairly complicated,” he said.

Wheat was harvested in Ukraine’s Kyiv region this week.



Photo:

STRINGER/REUTERS

Canadian agribusiness Viterra has one vessel under charter within Odessa’s ports that is loaded and awaiting discharge.

“Today, the industry is focused on getting the vessels that are currently in port moving,” a Viterra spokesman said. “As new exports increase, vessel owners have indicated they are prepared to enter Ukrainian ports, and are awaiting the process to do so under the U.N. deal.”

Mr. Kubrakov, the infrastructure minister, said three ports in Ukraine’s Odessa region—Pivdenniy, Chornomorsk and Odessa—are now operating, and the government hopes ultimately to resume exports from Mykolaiv port to the east, though it would require significant repairs after being badly damaged by Russian shelling in recent months.

Write to Matthew Luxmoore at [email protected] and Will Horner at [email protected]

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