By Áine Quinn (Bloomberg) —
Grain markets steadied on Tuesday, with farmers and traders on alert for Russia’s next moves as ships continue to move through Ukraine’s safe-passage corridor despite repeated warnings from Moscow.
Three more crop vessels departed Ukraine on Tuesday, the United Nations said, and the 12 ships that left yesterday have cleared the corridor safely. No new ships headed for Ukraine through the corridor. Wheat futures fell 0.9% in Chicago after surging 6.4% on Monday, and corn was little changed.
The United Nations and Turkey are trying to salvage the agreement to keep Ukrainian exports flowing after Russia suspended its involvement at the weekend, but Russia has responded to the continued shipments by warning that it can’t guarantee the safety of vessels in the corridor. The Defense Ministry said that continued movement of ships from Ukraine was “unacceptable.”
Ukraine on Monday said Russia launched a massive wave of missile attacks across the country, and later separately reported Russia struck two civilian tugboats involved in transporting a grain barge near Ochakiv, to the east of the UN-agreed export corridor.
Russia’s threats are adding to risks for vessels traversing the corridor, which are already likely to face higher shipping and insurance costs, while shipowners may be wary of sending vessels amid fears they could get stranded.
In Ukraine, deliveries of crops to ports are grinding to a halt in response to the growing uncertainty, the Ukrainian Agribusiness Club said on Monday. Russia’s move “will significantly reduce exports in November,” as the grain market is in no hurry to book new vessels for loading, UkrAgroConsult analysts wrote in a note.
The process had been fraught with risk even before Russia’s announcement on the weekend, as a swelling backlog kept ships piling up and Russian criticism of the deal raised questions about whether it would be renewed as a Nov. 19 deadline drew closer.
The UN’s joint coordination center, which monitors vessels moving through the corridor and oversees inspections in Istanbul, said 46 inspections were completed on Monday and the ships cleared to sail onwards to their destinations. The three new vessels to depart Ukraine, carrying a total 84,490 tons of grain and food products, were agreed on by Ukrainian, Turkish and UN delegations at the JCC, and the Russian delegation was informed.
Four inbound ships had been approved to travel to Ukraine on Monday — two reached Ukraine’s ports as of Tuesday, one didn’t enter the corridor, while one turned back for insurance reasons, according to Ismini Palla, UN spokesperson for the Black Sea Grain Initiative.
The UN and Turkey, which brokered the deal, are making efforts to reverse Russia’s suspension.
UN Secretary-General Antonio Guterres is engaged in “intense” talks about the situation, spokesman Stephane Dujarric said on Monday. Turkish Defense Minister Hulusi Akar told Ukrainian defense and infrastructure ministers in a call that the Black Sea grain corridor should be kept separate from circumstances of the conflict.
German Chancellor Olaf Scholz and Ukrainian President Volodymyr Zelenskiy discussed the situation and called for the implementation and extension of the grain agreement under the aegis of the UN not to be jeopardized in order to avoid further burdening the global food situation, according to the German government.
–With assistance from Christoph Rauwald and Daryna Krasnolutska.
© 2022 Bloomberg L.P.
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