October 6, 2022


KYIV, Ukraine—Ukraine said its first grain shipment since the start of Russia’s invasion was successful and could see exports rise to pre-war levels within two months, but industry players warned several hurdles remained. .

Oleksandr Kubrakov, Ukraine’s infrastructure minister, said 17 ships loaded with grain were ready to depart from three Ukrainian Black Sea ports operating under a deal agreed last month. He said two or three ships would soon begin leaving daily, with traffic eventually reaching 100 departing ships each month.

Mr. Kubrakov said Ukraine could return to exporting 3 million metric tons of grain a month by mid-to-late September, bringing about $1 billion to an economy decimated by the Russian invasion.

Ukraine’s first grain shipment since the Russian invasion passed inspection in Turkey as part of an internationally brokered deal that is expected to release large stockpiles of crops trapped in the country and ease global food shortages. Photo: Turkish Ministry of Defense/AFP via Getty Images

Getting grain shipments flowing again from Ukraine, one of the world’s biggest grain producers, is critical to easing global food shortages and boosting the country’s economy.

While Ukrainian farmers, grain traders and shipping companies cheered the first shipment, which is expected to arrive at a Lebanese port on Saturday, few expect a return to normal any time soon.

It could not be determined how many shipping companies are prepared to take the risk of going to Ukrainian ports while the war continues and whether insurance for such voyages will prove prohibitive.

Ukraine had a backlog of 16 million metric tons of grain in warehouses before the invasion, and another 13 million metric tons of barley and wheat have been harvested so far this summer, according to Ukraine’s Ministry of Agrarian Policy and Food.

The voyage of the Razoni, a Sierra Leone-flagged bulk carrier carrying 26,000 metric tons of grain, was the first test of the United Nations-brokered deal reached last month between Ukraine and Russia. It is expected to arrive in Lebanon on Sunday morning after undergoing an inspection in Istanbul overseen by representatives from Russia, Ukraine, Turkey and the UN, Mr Kubrakov said.

While the start of shipments is promising for Ukrainian farmers and the country’s buyers mainly from the developing world, the flow of corn, wheat and barley will still be lower than before the war. It will take months to clear the grain stockpile, and this season’s crops are already going into overcrowded storage, even if the new crop is expected to be depleted by the war. The U.S. Department of Agriculture projects that Ukraine will export 30.6 million metric tons of grain and seeds in the 2022-23 season, nearly half of the previous season’s capacity.

Mr Kubrakov pointed to comments from Ukrainian President Volodymyr Zelensky, who on Wednesday played down the importance of the first shipment and described it as just a fraction of what Kyiv needs to sell to boost its battered economy.

Ukrainian President Volodymyr Zelensky and Oleksandr Kubrakov, Minister of Infrastructure of Ukraine, visited the port of Chornomorsk, Ukraine, last month.


Photo:

str/Agence France-Presse/Getty Images

“The idea is just to prove that this initiative can work for now—that was important,” Mr. Kubrakov said.

Traders and shipping companies are closely watching Razoni’s voyage as a test run that could make other missions possible. Gaurav Srivastava, president of Harvest Commodities SA, is waiting for the green light for his cargo of 50,000 metric tons of feed corn, currently on a ship in Odessa, to set sail.

The corn was loaded onto the ship in February, before the Russian invasion trapped it there. The ship has been inspected in accordance with the agreement, but there have been delays in obtaining new phytosanitary documents for the cargo, he said.

Mr Srivastava, who has tried to export grain through Ukraine’s congested land routes, hopes to send fresh ships to Ukrainian ports to carry more grain if the passage of this first cargo proves successful.

“The goal is that we will be able to send more ships to pick up these grain shipments. The thing is, there are very few ships that are willing to go to these lands and the insurance is quite complicated,” he said.

Wheat was harvested in the Kiev region of Ukraine this week.


Photo:

STRINGER/REUTERS

Canadian agribusiness Viterra has chartered a vessel in the ports of Odessa, which is loaded and waiting to be unloaded.

“Today, the industry is focused on moving the ships that are currently in port,” a spokesman said. “As new exports increase, shipowners have indicated they are ready to enter Ukrainian ports and await the process to do so under the UN agreement.”

Mr. Kubrakov, the infrastructure minister, said three ports in Ukraine’s Odessa region—Pivdenniy, Chornomorsk and Odessa—were now operating, and the government eventually hoped to resume exports from the Mykolaiv port to the east, although it would require major repairs after poor condition. has been damaged by Russian bombing in recent months.

Write to Matthew Luxmoore at Matthew.Luxmoore@wsj.com and Will Horner at William.Horner@wsj.com

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