(Bloomberg) -- The first grain ship in over two months left one of Ukraine’s Black Sea ports, as Kyiv seeks to defy Russia’s effective maritime blockade following the collapse of a safe-passage deal. Wheat prices fell.
The Resilient Africa left Chornomorsk with 3,000 tons of wheat and is heading toward the Bosphorus, Infrastructure Minister Oleksandr Kubrakov posted on X, the social media platform formerly known as Twitter. Another vessel is at the port loaded with wheat for Egypt, he added. They arrived on Saturday.
It’s too early to know if Kyiv’s efforts to reopen a corridor will significantly lift exports. The market is watching for a response from Moscow, which has said it would treat any ships headed to Ukraine’s ports as potentially carrying weapons. In August, the Russian navy fired on a vessel to force it to stop for checks.
“So far there’s no action from mainstream owners to trade Ukraine,” according to Vasilis Mouyis, joint managing director of Greece-based Doric Shipbrokers SA, which sent vessels through the shipping passage before the deal collapsed in July. “If I were crew on a vessel, I certainly would think more than twice to visit Ukrainian ports right now.”
Ukraine is a major grain exporter and historically shipped agricultural products all over the world from its Black Sea ports, which have been blocked since Moscow exited the United Nations and Turkey-brokered deal. That’s forced Kyiv to use complicated and expensive river, rail and road routes to ship its crops, but they have also been targeted by Russian drones in recent weeks.
Still, “a combination of continued strong exports out of Russia and the possibility of exports coming through ports that were part of the Black Sea Grain Initiative” has weighed on grain prices, said Dennis Voznesenski, an analyst with Rabobank.
Ukraine is also proposing a new mechanism that would require exporters shipping grain to neighboring European Union countries to get permission in advance. Three of Ukraine’s EU neighbors said they would extend a ban on purchases of grain from Ukraine on Friday, defying a decision by the 27-nation bloc.
Another four vessels are expected to arrive in Chornomorsk in late September and early October, according to analysts at UkrAgroConsult. While the successful reopening of a maritime safe passage could spur trade, shipowners, crew and insurers are wary of sailing through the Black Sea, where risks have been escalating.
Five vessels left Odesa after the collapse of the grain deal, but they had been stranded in Ukraine since the beginning of the war and weren’t grain trade ships. Wheat futures are about 26% lower this year following bumper harvests in parts of the Northern Hemisphere including Russia.
--With assistance from Volodymyr Verbyany and Tarso Veloso.
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