Ukraine’s Black Sea crop shipments resumed on Wednesday, following another brief halt that sparked fresh worries about future cargoes from the key exporter.
(Bloomberg) — Ukraine’s Black Sea crop shipments resumed on Wednesday, following another brief halt that sparked fresh worries about future cargoes from the key exporter.
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 to the initiative — which has been crucial for bringing down global food-commodity costs from records reached after Russia’s invasion — on Moscow. Wheat futures declined.
The shipping resumption is good news for both Ukraine and developing nations that import its grain. But the latest halt — which followed a similar one last week — highlights uncertainty over the grain-export deal that Russia has threatened to quit if its issues regarding its own grain and fertilizers aren’t resolved by mid-May.
“Demands to control and interfere in the work of Ukrainian ports are unacceptable to us,” Ukrainian Infrastructure Minister Oleksandr Kubrakov said on Facebook.
This week’s Black Sea setback also came as Ukraine’s exports were hit by several European Union neighbors introducing bans on imports of its grain over concerns the supplies are hurting their own markets. Bulgaria on Wednesday followed Poland, Hungary and Slovakia in prohibiting imports.
While Ukraine’s agricultural products will be allowed to transit through those countries, the restrictions mean that 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 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 $6.995 a bushel in Chicago, after nudging up to near a three-week high on Tuesday. Prices dropped 2.5% in Paris.
The resumption of Black Sea ship inspections followed discussions facilitated by the United Nations and Turkey, the joint coordination center said. 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.
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.”
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