Ukraine has finally signed an agreement to unblock grain exports via the Black Sea, which has so far been thwarted by Russia's invasion. But resuming the process will not be so easy..
Bloomberg writes about this, recalling that today representatives of Kyiv and Moscow signed parallel agreements with Turkey and the UN during a meeting in Istanbul.. These agreements are designed to resume the movement of merchant ships to the ports of Ukraine, which has become one of the main suppliers of wheat, corn and sunflower oil in the world.. This is good news for a tight food market, as well as Ukraine's economy, which has been depleted by the Russian war..
But even after the agreements are signed, traders still need to be found to start the flow of food. Ukraine needs to clear sea lanes of mines, find ships to transport grain, and send trains and trucks south as they are now transporting goods to other destinations.. Another challenge is to find an insurer. The success of the plan also depends on security guarantees from Moscow and the willingness of Vladimir Putin to fulfill his part of the deal at a time when he is preparing to annex more of Ukraine and continues to advance in the east of the country.. Analysts and Western officials are skeptical that Ukraine can quickly return to its role as a global agricultural hub..
“As long as active military operations continue on the territory of Ukraine, it will be extremely dangerous to be in Ukrainian waters,” said Andriy Kupchenko, an analyst at APK-Inform..
The tension of the situation is well illustrated by the fact that Ukraine signed an agreement with Turkey and the UN, and not with Russia directly.. Moscow signed a similar document with Ankara and an international organization. Many grain transport ships stuck in Ukraine due to Russian invasion. Kyiv was forced to export by rail, trucks and river routes. Once the ports in the Black Sea are unblocked, it will be difficult and expensive to find the necessary vessels and insurers willing to vouch for the cargoes.. Neil Roberts, chairman of aviation and maritime transport at Lloyd's Market Association, believes that specialized insurance companies may agree to work with cargo from Ukraine, given their humanitarian nature.. But logistics issues will have to be resolved so that there are enough workers to load and transport grain..
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" At least 80 or 90 ships stuck there will now be able to get out. But the next steps will be a bit more difficult,” said Lucas Dorrestein, head of global operations at trading company Viterra..
Ukraine has approximately 25 million tons of blocked grain. And the farmers have already started harvesting new crops. Some elevators near ports. But farmers and traders will need safe routes to keep supplies going.. Ukraine's southern regions remain dangerous, infrastructure has been damaged, which could limit progress, Kupchenko says.
In addition, many railway wagons and trucks are waiting in line trying to transport grain to neighboring EU countries.. They need to be returned to traditional port-oriented routes..
Export support also depends on guarantees that Russia will not attack infrastructure. During the war, Moscow was repeatedly accused of stealing Ukrainian grain and destroying elevators with the help of missile strikes.. Some officials are convinced that the Kremlin is going to use the threat of food shortages and global hunger as a tool for political bargaining..