By Michael Hogan
HAMBURG, Aug 5 (Reuters) – International and local traders started to offer more Ukrainian-origin grain for sale on Friday as news of the first shipment from the country since Russia’s invasion boosted confidence in a deal to unblock exports from its sea ports.
Prices were discounted, with roughly 20 million tonnes of grain from last year’s crops still stuck in the country.
Diplomatic efforts have focussed on finding a way to transport around 1.5 million tonnes of grain loaded on ships or housed in port storage and millions more in silos across the country, as well as massive volumes from the ongoing harvest.
The July 22 deal brokered by the United Nations and Turkey paved the way for the resumption of grain shipments from Ukraine after U.N. agencies warned a growing global food crisis would lead to starvation and mass migration on an unprecedented scale.
“I think there is more optimism growing, especially with the news that the first empty ship is going to Ukraine to pick up cargo,” a European trader said. A Turkish bulk carrier was expected to arrive in the Ukrainian Black Sea port of Chornomorsk on Friday.
Traders said offers included a consignment of 50,000 tonnes of Ukrainian 11.5% protein milling wheat for August shipment at $310 a tonne on a free on board (fob) basis from Chornomorsk, and another consignment of 30,000 tonnes for loading in one of the safe corridor ports at $320 a tonne fob.
Prices offered are about $10-$20 cheaper than those of Russian 11.5% milling wheat from Russian Black Sea ports.
NEW HOMES NEEDED
There were roughly 70 ships stranded in Ukraine when the conflict began in February, some of which had already been loaded with grain. The first left the port of Odesa for Lebanon on Monday and three more were scheduled to leave on Friday.
Most deals to buy grain from Ukraine were cancelled after the invasion, so sellers need to find new homes for the cargoes, traders said.
Ukraine’s Seaport Authority earlier this week said 480,000 tonnes of wheat, vegetable oil and corn had been loaded onto ships at the three ports currently involved in the safe corridor scheme, Pivdenny, Odesa and Chornomorsk.
Another million tonnes of grain is stored in grain terminals and warehouses of Ukrainian ports, the authority said.
The vast majority of the nation’s stockpiles, however, are spread across the country, with farm silos crammed full and farmers repurposing cow barns and workshops to store supplies.
Transporting them to ports may prove challenging as the war continues.
Egypt, typically the world’s largest wheat importer, relies heavily on imports from the Black Sea region, and its General Authority For Supply Commodities (GASC) had around 300,000 tonnes of Ukrainian wheat booked for February and March delivery.
GASC cancelled the contracts for four cargoes, totalling 240,000 tonnes, which never loaded but a fifth loaded cargo is still expected to sail.
Traders said the cargo was inspected by Egyptian officials before the conflict began and it is not yet clear if it will be inspected again given the amount of time which has elapsed.
(Additional reporting by Sarah El Safty in Cairo; Writing by Nigel Hunt; Editing by Veronica Brown and Jan Harvey)
(c) Copyright Thomson Reuters 2022.
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