UN says ideas ‘floated’ on how to get Ukraine, Russia grain to world

On Tuesday the UN said that a number of ideas were being “floated” on how to get Ukrainian, and Russian, grain to the rest of the world. However, all that UN spokesman Stephane Dujarric could or would say was that the UN was exploring “all possible avenues” to ensure that “Ukrainian grain, Russian grain, Russian fertilizer are out on the global market”.

Ukraine’s Foreign Minister Dmytro Kuleba said an alternative to the Black Sea grain deal had to be found, claiming that “there are very active discussions now.”

The EU said on Tuesday July 18th that it was seeking to transport more Ukrainian grains via road and rail. Kuleba said however that Ukrainian exports through Europe would not be able to “compensate for the absence of deliveries from Ukrainian ports on the Black Sea.”

Kuleba said the focus on reviving Black Sea shipments was either to continue within the existing framework or create a new model, while admitting that “the problem, of course, is what is going to happen if Russia decides to attack a vessel carrying grain.” Kuleba said on Tuesday during a visit to the UN that “we have to take risks and we have to demonstrate that we can carry on without Russia”.

Ukraine’s President Volodymyr Zelenskiy said on Tuesday in his nightly video address that without Ukraine’s exports “the deficit on the global market will, unfortunately, be quite tangible.”

Within the markets, there were feelings that the wishes of the UN and the ideas of Ukraine were somewhat inconsistent with the reality of the situation. Ukraine has called on other nations to help facilitate shipments from the three sea ports that had been covered by the agreement, Odesa, Yuzhne and Chornomorsk. However, the US said that shipping escorts were not an option.

Insurance broker Marsh on Tuesday had said that a programme it had put together had been suspended. Last August Marsh and Ascot Group, launched a Marine Cargo and War facility that provided cover for Ukrainian grain and other vital food supplies being shipped through safe corridors established by the then newly signed Black Sea Treaty between Russia and Ukraine.

Vasilis Mouyis, joint managing director of Greece-based Doric Shipbrokers SA, which had previously had sent vessels through the shipping passage, was unambiguous on the matter. “No sane owners will call there uninsured,” he told Bloomberg, adding that, without the protection of the safe corridor “the Ukraine trade is dead.”

Ukraine has asked the United Nations and Turkiye whether they will continue to back the deal. “The main task for Ukraine now is to get the support of Turkiye,” said Dmitry Skornyakov, CEO of HarvEast Holding. He suggested that military escorts from Turkiye could be used for ships entering and leaving Ukraine’s ports.

That seemed optimistic, as it would be a highly risky move for Turkiye to make. Turkiye almost certainly would not jeopardize its naval ships to assist vessels from Ukraine.

“I don’t think shipowners will go to the Ukrainian ports until the corridors are reestablished – it’s not safe to do so,” said Paul Markides, marine quality manager at dry-bulk shipowners’ global trade association Intercargo.

Meanwhile, as of the morning of July 19th the Kerch Strait remained closed for ships sailing to and from the Russian or Russian-occupied Sea of Azov ports. The continuing transit ban was something of a puzzle, with speculation revolving around two possible explanations. The first was that the structural integrity of the bridge might have been compromised; the second was that there might be security concerns for vessels travelling through the strait.

More than 100 vessels were reported as stuck at Kerch Strait anchorages in the Sea of Azov north of the bridge and security the Black Sea, south of it.