Ukraine and Britain Reach Deal on Discounted Insurance for Black Sea Exports

By Pavel Polityuk

KYIV, Nov 14 (Reuters) – Ukraine and Britain have agreed on a special mechanism for discounts on war risk insurance on exports through the Black Sea corridor, which has helped transport almost 4 million metric tons of goods since August, Ukrainian officials said on Tuesday.

Kyiv launched a “humanitarian corridor” for ships bound for African and Asian markets to try to circumvent a de facto blockade in the Black Sea after Russia quit a United Nations-brokered deal that had guaranteed Kyiv’s seaborne exports during the war.

On Tuesday, Ukrainian Prime Minister Denys Shmyhal said the special mechanism to allow discounts involved 14 insurance companies.

“It will make it possible to make a discount on the cost of insurance against military risks for exporters of all products from Ukraine. This will make the Black Sea corridor more accessible to a wider range of exporters,” Shmyhal said during the government meeting, video of which was posted on the Telegram messaging platform.

War risk insurance remains one of the critical issues for securing the capabilities of the route since Russia keeps targeting it, dropping mines close to the path, Ukraine says.

Insurance premiums have risen sharply following a Russian attack on a Liberia-flagged civilian vessel entering port in the Odesa region in early November, killing a Ukrainian pilot and injuring four crew members. It was the first fatal strike involving a commercial ship in many months.

Ukrainian officials said the corridor – also used for grain shipments – continued working despite all the dangers, but brokers reported a rise in freight prices.

“This (attack) is of course bad, it affects the cost of freight and the willingness of traders to buy grain from us and work with Ukraine,” Ukrainian Agriculture Minister Mykola Solsky told national television late on Monday.

“We understand that Odesa region ports need to be protected, everyone is doing it and the situation is improving every week, and we will still export,” Solsky added.

GRAIN EXPORTS

“The grain corridor is working. We are now overcoming the four million tons mark and maintaining positive dynamics,” Ukrainian President Volodymyr Zelenskiy said on Telegram on Tuesday.

Ukrainian transport authorities last week said 91 vessels exported 3.3 million metric tons of agricultural and metal products as of Nov. 9.

Ukraine’s government expects a harvest of 79 million tons of grain and oilseeds in 2023, with its 2023/24 exportable surplus totalling about 50 million tons.

Ukrainian grain exports have fallen to 9.8 million metric tons as of Nov. 6 in the 2023/24 July-June marketing season from 14.3 million tons a season earlier.

The ministry gave no explanation for the drop but traders and farmers’ unions have said blocked Ukrainian Black Sea ports and Russian attacks on the country’s Danube River ports are the main reasons for lower exports.

Ukraine has traditionally shipped most of its exports through its deep water Black Sea ports.

(Reporting by Pavel Polityuk and Yuliia Dysa; Editing by Sharon Singleton and Jonathan Oatis)

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