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War Forces Grain and Oil to Travel Record Distances, UN Says

FILE PHOTO: Grain is loaded on a truck at the Mlybor flour mill facility in Chernihiv region, Ukraine, May 24, 2022. REUTERS/Edgar Su/File Photo

War Forces Grain and Oil to Travel Record Distances, UN Says

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September 27, 2023

(Bloomberg) —

Buyers are shipping grains and oil from further and further away after Russia’s invasion of Ukraine disrupted traditional trade routes.

Shipments of grain traveled longer distances in 2023 than any other year on record as importers switched to buying from other countries after Ukraine’s exports were blocked, according to a review of maritime transport from the United Nations Conference on Trade and Development, or UNCTAD. Oil cargoes also traveled the furthest since at least 1999, as Russia looked for new export markets.

“We have longer distances being traveled mainly because of the disruption in the Black Sea and because of the war in Ukraine,” Rebeca Grynspan, UNCTAD secretary-general, said at a briefing in London. “It will be very important to try to mitigate the risk factors that we are having because of the geopolitical issues.”

Russia is the world’s top wheat shipper and a major supplier of oil, while Ukraine is also a prominent food exporter. The Kremlin’s de-facto blockade of Ukraine’s Black Sea ports and attacks on its river ports have disrupted shipments of grains and agricultural goods. Meanwhile, Moscow is having to redirect its oil exports as European buyers are shunning the supplies. Russia has come to rely primarily on China and India to keep buying.

“Although grain shipments from Ukraine resumed in 2022 thanks to the Black Sea Initiative, several grain-importing countries had to rely on alternative grain exporters. They are instead buying from the United States of America, or Brazil, which requires longer hauls,” according to the report. 

© 2023 Bloomberg L.P.

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