Ukraine’s New Shipping Corridor Paves the Way for Food Exports
Grain thunders into rail cars and trucks zip around a storage facility in central Ukraine, a place that growing numbers of companies turned to as they struggled to export their food to people facing hunger around the world. Now, more of the grain is getting unloaded from overcrammed silos and heading to ports on the Black Sea, set to traverse a fledgling shipping corridor launched after Russia pulled out of a U.N.-brokered agreement this summer that allowed food to flow safely from Ukraine during the war.
Impact on Ukrainian Economy and Agriculture
“It was tight, but we kept working…we sought how to accept every ton of products needed for our partners,” facility general director Roman Andreikiv said about the end of the grain deal in July. Ukraine’s new corridor, protected by the military, has now allowed him to “free up warehouse space and increase activity”.
Growing numbers of ships are streaming toward Ukraine’s Black Sea ports and heading out loaded with grain, metals, and other cargo despite the threat of attack and floating explosive mines.
Renewed Confidence and Outlook
“We are seeing renewed confidence among commercial operators keen to take Ukrainian grain cargoes,” said Munro Anderson, head of operations for Vessel Protect, which assesses war risks at sea and provides insurance with backing from Lloyd’s, whose members make up the world’s largest insurance marketplace.
Impact of Attacks on Trade and Infrastructure
After ending the agreement brokered by the U.N. and Turkiye, Russia has attacked Ukraine’s Black Sea ports — a vital connection to global trade — and grain infrastructure, destroying enough food to feed over 1 million people for a year, the U.K. Government said.
Despite such attacks, Ukraine has exported over 5.6 million metric tons of grain and other products through the new corridor, U.S. Ambassador to Ukraine Bridget Brink tweeted on Friday.
Challenges and Risks
Since the war started, Ukraine has struggled to get its food supplies to countries in need. Even during the yearlong U.N. deal, when Ukraine shipped nearly 33 million metric tons of food, Russia was accused of slowing down ship inspections required to be done by all sides.
Efficiency and Cost of the New Corridor
Before the invasion, the exporter paid $50 per metric ton to ship grain through the Black Sea. Alternatives since the war — including river routes through Europe — cost the company nearly three times more, Mr. Osmachko said. Under Ukraine’s new corridor, the company pays $70 to 80 per metric ton.
Government and Industry Initiatives
To ease that hurdle, an insurance program launched this month to provide affordable coverage to shippers carrying food from Ukraine’s Black Sea ports. The partnership between insurance broker Marsh McLennan, Lloyd’s, two Ukrainian state banks and the government offers up to $50 million for each of two types of coverage protecting against damage and other losses.
In another boost, a humanitarian program was extended on November 25 that donates Ukrainian grain to nations facing food shortages with support from countries worldwide. Next, it will bring enough grain to help nearly 4,00,000 people in Nigeria, Mr. Zelenskyy said.
Conclusion and Future Outlook
The goal for the new shipping corridor is to export at least 6 million metric tons of grain a month, Ukrainian Agriculture Minister Mykola Solskyi said. It has a lot of work to do: Ukraine exported 4.3 million metric tons of grain in October through all routes, the ministry said.
“We maintain cautious optimism, based on the fact that we have been fighting before and will continue to fight further,” he said.