Ukraine’s Black Sea crop shipments resumed on Wednesday, following a brief halt that sparked fresh concerns about future cargoes from the key exporter already contending with import bans from some of its European Union neighbors.
(Bloomberg) — Ukraine’s Black Sea crop shipments resumed on Wednesday, following a brief halt that sparked fresh concerns about future cargoes from the key exporter already contending with import bans from some of its European Union neighbors.
Inspections of vessels under a safe-passage corridor are again taking place after a two-day stoppage, according to Ukraine and the joint coordination center which oversees the checks. Kyiv has blamed the disruption — which has been crucial for bringing down global food-commodity costs from records reached after Russia’s invasion — on Moscow. Wheat futures declined.
While the shipping resumption is good news for both Ukraine and developing nations that import its grain, it highlights uncertainty over the crop-export deal that Russia has repeatedly threatened to quit. It also comes as several EU countries halted Ukrainian grain imports over concerns the supplies are hurting their own markets, with Bulgaria on Wednesday following Poland, Hungary and Slovakia in prohibiting incoming shipments.
The European countries’ unilateral bans prompted the EU to look to prohibit the domestic sale of Ukraine’s grain in five member states, only allowing transit to other destinations, a senior EU official said Wednesday. Romania will introduce new safety measures at checkpoints, its agricultural ministry said.
Read: EU to Ban Domestic Sale of Ukraine’s Grain in Five Member States
The EU’s measure effectively means Ukrainian exporters face losing sales in those countries. For example, 7% of Ukraine’s corn and wheat exports have gone to Poland this season, according to UkrAgroConsult. Some 7% of its corn shipments have also gone to Hungary.
The Ukrainian Agribusiness Club lobby group said there will be some export losses, and that farmers may cut plantings if the import bans persist amid general uncertainty caused by Russia’s war.
“Now we have conditions for trade with the EU that are even worse than before the large-scale invasion,” UAC Director-General Roman Slaston said in an online briefing. He said while Ukraine had quotas for exports to the EU before the war, it hasn’t faced blanket bans.
Limited Reaction
The market has shown limited reaction to the recent disruptions, as it’s not a peak time for crop shipments and the new harvest is several months away. Benchmark wheat futures fell 1.4% to $6.9975 a bushel in Chicago, after nudging up to near a three-week high on Tuesday. Prices dropped 2.4% in Paris.
The resumption of Black Sea ship inspections followed discussions facilitated by the United Nations and Turkey, the joint coordination center said. Three ships had been inspected as of Wednesday afternoon, according to the center.
Under a deal brokered last year, the center in Istanbul hosts teams from Ukraine, Russia, Turkey and the UN that check ships headed to and from three Ukrainian ports. Russia has threatened to quit if its issues regarding its own grain and fertilizers aren’t resolved by mid-May.
Russian Foreign Ministry spokeswoman Maria Zakharova earlier said the issues with the corridor arose “solely as a result of actions by Ukrainian representatives, as well as UN officials, who are apparently unwilling or unable to stand up to them.”
–With assistance from Andra Timu.
(Updates with EU looking to Ukraine grain ban in fourth paragraph, number of ships inspected in ninth.)
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