The 43,775 dwt bulk carrier, built in 1996 and flying the Turkish flag, is carrying the last cargo in the Black Sea Grain Initiative which is due to expire today. The deal was brokered by the United Nations (UN) and Turkey and signed in July 2022, enabling essential grain cargoes to be exported by Ukraine to world markets.
Following Russia’s invasion of Ukraine in February last year, a large number of ships were trapped and an estimated 20 million tonnes of grain exports were blocked. However, after the deal was struck in July, more than 30 million tonnes of grain are estimated to have been exported, a lifeline for many countries – including some of the world’s poorest nations – which rely heavily on grain for basic foodstuffs.
The Initiative allows grain ships to transit the Black Sea via a corridor three nautical miles wide and 310 miles long to the Bosphorus. Ukraine is allowed to export grain from the ports of Odessa, Chornomorsk, and Yuzhny/Pivdeeyi.
Without a resumption of the deal, however, millions of people will be hit by a food crisis. Many face outright famine. Grain is a staple food in many African and Middle Eastern countries where, as in most regions, people are already facing the impact of record global food price inflation. The UN has estimated that 44 million people in 38 countries face ‘emergency levels of hunger’.
President Putin has held off renewing the Black Sea arrangement, which is supposed to be extended for 120 days at a time. However, in March and May, Russia agreed only to 60-day extensions and it is the May deal that has now ended. Putin wants Western sanctions to be eased so that the country can resume its own exports of grain and fertilisers.
Although there are no specific sanctions on Russia’s agricultural exports, Western sanctions effectively limit Russia’s access to international finance, shipping capacity, and insurance, thereby limiting the country’s exports indirectly.
Copyright © 2023. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.