Russia’s Attacks on Ukrainian Ports Pose Risks for Grain Shipping
LONDON (AP) — Ukraine’s grain exports are facing significant risks as Russia continues to target key ports and declare parts of the Black Sea dangerous for shipping. The United States has also warned that ships are at risk of being targeted. Despite these warnings and port attacks, there is still interest from ship owners in carrying Ukrainian grain through the Black Sea, if they can find ways to mitigate the risks.
John Stawpert, senior manager of environment and trade for the International Chamber of Shipping, which represents 80% of the world’s commercial fleet, stated that shipping has always been resilient in the face of risks. However, the recent attacks on grain infrastructure have raised concerns. A Ukrainian drone hit an ammunition depot in central Crimea, leading to an explosion. While there were no immediate reports of casualties, authorities are evacuating civilians within a five-kilometer radius.
In a symbolic move that emphasizes U.S. support for Ukraine, President Joe Biden elevated CIA Director William Burns to his Cabinet. The move highlights the intelligence chief’s influence and his work in Ukraine. Additionally, the Vatican is pressing ahead with a plan to reunite Ukrainian children taken to Russia during the war with their families, while a prominent hard-line Russian nationalist who criticized President Vladimir Putin’s actions in Ukraine has been arrested on charges of extremism.
The recent strikes on Ukrainian ports come after Russia withdrew from a wartime accord that aimed to provide safeguards for shipping companies last year. Ukraine, one of the major suppliers of grain to developing nations, shipped millions of metric tons of grain worldwide, including 80% of the World Food Program’s wheat for humanitarian aid this year. In response to the collapse of the grain deal, Ukraine established its own temporary shipping corridor, offering guarantees of compensation for potential damage.
However, Russia warned that ships in certain areas of the Black Sea would be assumed to be carrying weapons destined for Ukraine. In response, Ukraine stated that vessels heading to Russian Black Sea ports would be considered as carrying military cargo. Russian Deputy Foreign Minister Sergei Vershinin announced that the navy would check vessels for weapons before taking further action.
The continuation of grain shipments from Ukraine will depend on securing insurance coverage for potential damage or injuries to crew members. Shipping companies are weighing the risks, as ships exporting Ukrainian grain are worth tens of millions of dollars and carry food worth tens of millions as well. Threat assessments have become increasingly important for ships operating in areas prone to piracy, terrorism, and war zones.
The risk for ships in the Black Sea includes explosive mines and the potential to become collateral damage or direct targets. Insurers are wary of covering these risks without guarantees from the U.N. or another entity. The International Group of P&I Clubs, which offers liability coverage for the majority of the world’s cargo shipped by sea, may be key in mitigating these risks through insurance.
The head of the seafarers division of the International Transport Workers’ Federation expressed concerns about the safety of sailors amidst the ongoing fighting. Ukrainian farmers may resort to alternative transportation routes, such as roads, railways, and rivers through Europe, leading to higher costs and lower production. Additionally, Ukraine faces challenges in getting its grain to the world without hurting the agricultural industries of neighboring countries. Five European Union countries have proposed extending a ban on Ukrainian grain imports through the end of the year, citing market flooding and lower prices for their farmers.
The risks and disruptions to Ukrainian grain exports have significant implications for developing countries already grappling with high food prices. The rising wheat prices could push millions of people into food insecurity, exacerbating the global hunger crisis. While Ukraine is exploring alternative export routes, the Black Sea remains the optimal route for the country’s grain shipments.