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Ukraine Crisis

Black Sea agribulk exports fall 35% in April due to Ukraine war

Photo: Twitter screenshot Bangladeshi bulker on fire after missile strike
The Third Engineer of the bulker Banglar Samriddhi was killed in missile strike
The Russian invasion of the Ukraine is blocking key agribulk exports from the Black Sea region driving up global food prices.

Assessing the impact of the conflict on exports S&P Global Market Intelligence said total seaborne agribulk shipments from the Black Sea region in April fell 35% year-on-year to 4m tonnes.

Shipments of corn and barley from the Black Sea area were hard hit, down 76% to 891,000 tonnes, and down 82% to 65,000 tonnes respectively. However, wheat shipments were reported to be up 44% at 3m tonnes.

S&P noted that Black Sea agribulk shipments declined to almost all import regions and territories in April including North Africa, Middle East, Northwestern Europe, Japan, Korea, Taiwan, mainland China, Southeast Asia and West Africa. The only region to see a rise in shipments was the Mediterranean, with an increase in agribulk exports from the Black Sea region of 15% to 1.2m tonnes

A report issued this week by insurers Allianz Global Corporate & Specialty (AGCS) highlighted that the biggest impact of the war on shipping so far had been on vessels trading to the Black Sea and Russia, with Ukraine’s major ports, including Odessa closed by a Russian blockade. The insurer noted that Ukraine moves 70% of its exports by sea and some 99% of its grain exports are moved by ship.

With the war in Ukraine increasingly looking to be a drawn out conflict there could be further negative impact on agribulk exports.

Pranay Shukla, Associate Director at S&P Global Market Intelligence, said: “There could also be further significant downside risks to the Black Sea agribulk forecast for this year depending on how long the war extends and if Ukraine can manage its exports from Romania and Poland, while upside risks could arise from Russian wheat exports on expected strong domestic wheat harvest.”

Learn more about the impact of conflict in Ukraine on dry bulk shipping from The Maritime Podcast

S&P currently forecasts that agribulk shipments from the Black Sea region will decline 37% year-on-year to 11.2, tonnes in the second quarter of 2022, and by 20% year-on-year to 83.9m tonnes for the full year in 2022.

As vessels remain trapped in Ukraine ports in the ongoing conflict insurance claims are likely to grow.

“The insurance industry is likely to see a number of claims under specialist war policies from vessels damaged or lost to sea mines, rocket attacks and bombings in conflict zones,” explained Justus Heinrich, Global Product Leader, Marine Hull, at AGCS. “Insurers may also receive claims under marine war policies from vessels and cargo blocked or trapped in Ukrainian ports and coastal waters.”

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