September 28, 2022
bne IntelliNews - First ship leaves Odesa carrying Ukrainian grain as Russian blockade finally lifts


Ukrainian grain has finally left the port of Odesa for the first time since Russia’s full-scale invasion, NV Ukraine reported on August 1.

This comes after an agreement was signed on July 22 to open the Russian blockade of Ukraine’s Black Sea ports that has trapped an estimated 25mn tonnes of grain and escalated a global food crisis. The deal, known as the “Black Sea Initiative”, will ensure that Ukrainian grain is safely transported through the Black Sea and will be organised by a control centre in Istanbul consisting of UN, Turkish, Russian and Ukrainian officials.

The first ship sails under the flag of Sierra Leone and will export 26,000 tonnes of Ukrainian grain to Tripoli, Lebanon via a transit corridor established by the UN and Turkey, according to Ukrainian Infrastructure Minister Alexander Kurbakov.

In addition, 16 more ships are waiting in the ports of Odesa, while Ukraine will also receive applications for the arrival of new vessels. The minister believes that the operating ports will reach their full capacity of transshipment in the coming weeks.

With Ukraine’s devastated agricultural industry looking set to recover in part, it is believed the country will receive up to $1bn a month from grain exports. Nevertheless, the industry has suffered damage in the range of $4-6bn, the Kyiv Independent reported. This includes the damage to “infrastructure such as irrigation equipment, storage, shipping and processing infrastructure, greenhouses, field crops, farm animals,” according to Viktoriia Mykhalchuk, representative of the UN’s Food and Agriculture Organisation (FAO).

Storage space has been of major concern for Ukrainian farmers, who have continued harvesting but with limited space to store products as 35% of available warehouses are full. Moreover, Russian forces have damaged or destroyed 14% of Ukrainian granaries, whilst 10% are located in Russian-occupied territories, NV Ukraine reported on July 29.

In response, the FAO will purchase the necessary equipment for Ukrainian farmers, including modular grain warehouses, according to Mykhalchuk. The programme will be available for farmers across 20 Ukrainian oblasts and will cover 25% of the national demand.

The blockade has severely damaged Ukraine’s agricultural industry, one of its most important sectors, contributing to the country’s economic decline. Ukraine was forced to look for alternatives via neighbouring EU countries, using rail, road and river routes. However, the routes created certain bottlenecks, resulting in a 44% drop in June compared to 2021, with only 1.11mn tonnes of grain exported in the first 22 days.






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