Despite the threats from Russia in the Black Sea, Ukraine has found a new method to export grain to the rest of the world.
In central Ukraine, an increasing number of companies are utilizing a storage facility to transport grain via rail cars and trucks in order to meet the demand for food in countries experiencing famine.
Currently, a larger amount of grain is being removed from overcrowded silos and transported to ports on the Black Sea. This grain will travel through a new shipping route that was established after Russia withdrew from a U.N.-brokered deal earlier this year. This deal had previously allowed for the safe transport of food from Ukraine during the ongoing war.
“We faced challenges, but we persevered…we strategized on how to receive the required amount of products for our partners,” stated Roman Andreikiv, the general director of the facility, when discussing the conclusion of the grain agreement in July. The establishment of Ukraine’s protected new corridor has resulted in the ability to “create more storage space and enhance operations.”
An increasing number of vessels are sailing towards Ukraine’s ports on the Black Sea, carrying goods such as grain and metals. Despite the danger of potential attacks and floating mines, this is providing a positive impact on Ukraine’s economy that heavily relies on agriculture. It is also reintroducing a vital source of affordable food products like wheat, corn, barley, sunflower oil to regions in Africa, the Middle East, and Asia where prices have escalated and food insecurity is becoming more prevalent.
Munro Anderson, the operations head of Vessel Protect, a company that evaluates risks at sea and offers insurance supported by Lloyd’s, stated that there is a growing sense of assurance among business operators who are interested in transporting Ukrainian grain shipments.
Ihor Osmachko, the CEO of Agroprosperis Group, one of Ukraine’s largest agricultural companies known for its exports, expresses a newfound sense of optimism compared to two months ago.
He stated that during that period, it was entirely uncertain how to endure.
Since the initial ship of the company left in mid-September, they have transported over 300,000 metric tons of grain to various locations including Egypt, Spain, China, Bangladesh, the Netherlands, Tunisia, and Turkey.
The U.K. government reported that Russia has launched an attack on Ukraine’s Black Sea ports, which are crucial for global trade, and its grain infrastructure. This has resulted in the destruction of a significant amount of food that could have fed over 1 million people for a year. This occurred after the agreement brokered by the U.N. and Turkey ended.
The risk to vessels is the main hurdle for the new shipping corridor. Russia, whose officials haven’t commented on the corridor, warned this summer that ships heading to Ukraine’s Black Sea ports would be assumed to be carrying weapons.
Volodymyr Zelenskyy, the President of Ukraine, stated that his allies have committed to supplying ships to assist in safeguarding commercial ships in the Black Sea. However, he also emphasized the need for additional air defense systems.
At an international summit for food security in Kyiv, the speaker stated that there is a shortage of air defense. However, he emphasized the importance of existing agreements and a positive sign that the corridor is functioning.
In the current month, a devastating attack with missiles targeted a commercial vessel flying the Liberian flag in Odesa port. However, shortly after, insurance companies, brokers, and banks joined forces with the Ukrainian government to introduce cost-effective insurance for grain shipments in the Black Sea. This move aims to provide reassurance to shippers.
U.S. Ambassador to Ukraine Bridget Brink tweeted on Friday that despite facing attacks, Ukraine has successfully exported more than 5.6 million metric tons of grain and other goods through a new route. According to Ukrainian Deputy Economy Minister Taras Kachka, this is almost half of what was exported monthly before the war.
According to Kelly Goughary, a senior research analyst at the agricultural data and analytics company Gro Intelligence, the current method of transportation is significantly more costly and time-consuming.
She stated that they are successfully producing and delivering products, which is exceeding expectations given the conclusion of the grain initiative.