Grain corridor activity remains sluggish

The Black Sea grain corridor's activity continues to be sluggish since the grain deal extension in late November owing to slow vessel inspections and a general decrease in their number, which has significantly slowed exports of agricultural products from Ukraine.

The number of daily vessel inspections by the Joint Co-ordination Centre (JCC) remains critically slow, decreasing to an average of 3.5 per day for inbound ships and three per day for outbound vessels in November, with the Russian side deliberately slowing them, Ukraine's deputy infrastructure minister Yuriy Vaskov said on 7 December at a meeting organised by the Trend and Hedge Club.

The number inspections of ships inbound and outbound at Ukrainian seaports accelerated during Russia's brief suspension of its participation in the grain corridor deal in late October-early November, but has since slowed again. As of 7 December, at least 75 inbound vessels and 27 outbound were waiting for inspection by the JCC.

As a result, only 2.64 mn t of agricultural products were shipped from the Pivdennyi, Odessa and Chornomorsk (POC) ports last month, down by 1.63mn t from October.

Ukraine has officially appealed to the partners of the grain initiative — the UN and Turkey — and submitted proposals to ensure the effective operation of the JCC, including increasing exported volumes as well as transhipment capacity of POC ports, which are currently used only at around 50pc. Ukraine has also proposed conducting at least 12 inbound and outbound inspections per day each, which could ensure monthly shipments of around 6mn t of agricultural products from the country.

Ukraine, Turkey and the UN have agreed that 40-45 outbound vessel inspections per week would be optimal for grain corridor operation and efficiency, while the number of inspections has dropped to an average of 24 per week or even lower in recent weeks. To ensure this, the UN and Turkey, which are guarantors of the grain initiative, continue diplomatic negotiations with the Russian delegation.

To speed up the process, Ukraine additionally has suggested stopping inspections of outbound ships, with Turkey and the UN supporting the proposal, as well as redirecting small-sized ships to the Danube river ports, while using the POC ports for Handy-sized and Panamax-sized vessels.

The Black Sea grain corridor agreement, which was signed in Istanbul on 22 July on two mirror copies by Turkey and the UN with Ukraine and Russia separately for 120 days, was automatically renewed for the same period beginning on 19 November, and now will be valid until 19 March 2023.

About 13.3mn t of grains, oilseeds and by-products have been shipped from the POC ports since Ukraine's Black Sea exports resumed on 1 August, with at least 531 vessels departing for ports in Asia, Europe and Africa.

By Kristin Yavorska