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Russia faces high costs now that Black Sea ships are military targets
来源：shippingazette 编辑：编辑部 发布：2023/08/14 09:07:01
RUSSIA's lack of ships are adding costs to moving Russian grain after President Vladimir Putin promised to replace Ukrainian grain with Russian shipments to Africa.
The promise came after Moscow ended the arrangement that gave Ukraine's food cargo safe passage in the Black Sea, imposing a de facto blockade and attacking Ukrainian storage facilities.
Ukraine's response, drone attacks on a Russian oil tanker and a warship at its Novorossiysk naval base, next door to a major grain and oil port, has added dangers to the Black Sea route.
Eduard Zernin, head of Russia's Union of Grain Exporters, cited a potential aggravation of what he called "hidden sanctions" that "may lead to an increase in freight and insurance costs" for Russia.
This "will be reflected in the price level of wheat and other grains on the world market", Mr Zernin said.
Even though agriculture exports are not subject to direct European and US sanctions restrictions placed on banking and Russian individuals are "hidden sanctions" on food shipments.
Global commodity houses are no longer helping Russia with the mechanics of trading its grain. Cargill, Louis Dreyfus and Viterra stopped such work on July 1, adding more pressure on Moscow to handle all aspects of grain deals including transport.
Cargill has said it would continue to ship grain from Russia's ports. It declined further comment.
Last year, Russia exported a record volume of wheat on ships chartered from international companies and traders. While exports remain strong, in the past few months it has had to source more of its own freight, increasingly relying on a "shadow fleet" of older vessels typically operated by companies based in Turkey and China, three shipping industry sources said.
Without the Black Sea corridor in place, both Russia and Ukraine warned in July that ships destined for each others ports could be treated as legitimate military targets, which three marine insurance source said was a further blow to Western companies' risk appetite.
Russia's Black Sea terminals handle about 70 per cent of the country's grain exports. They include the Novorossiisk and Taman ports.
"Russia's agriculture ministry forecast grain exports will fall eight per cent during the 2023/24 season from Russian last year's high of 60 million tonnes.
The ministry in December announced a plan to build a fleet of 61 new grain ships, citing "sanctions pressure and the refusal of many international carriers to cooperate with Russia".
Russian exporters need 34 grains ships with a carrying capacity of 60,000 tonnes and 27 with capacity of 40,000 tonnes, the ministry said in December. It did not say when they could be built by Russian shipyards.
The promise came after Moscow ended the arrangement that gave Ukraine's food cargo safe passage in the Black Sea, imposing a de facto blockade and attacking Ukrainian storage facilities.
Ukraine's response, drone attacks on a Russian oil tanker and a warship at its Novorossiysk naval base, next door to a major grain and oil port, has added dangers to the Black Sea route.
Eduard Zernin, head of Russia's Union of Grain Exporters, cited a potential aggravation of what he called "hidden sanctions" that "may lead to an increase in freight and insurance costs" for Russia.
This "will be reflected in the price level of wheat and other grains on the world market", Mr Zernin said.
Even though agriculture exports are not subject to direct European and US sanctions restrictions placed on banking and Russian individuals are "hidden sanctions" on food shipments.
Global commodity houses are no longer helping Russia with the mechanics of trading its grain. Cargill, Louis Dreyfus and Viterra stopped such work on July 1, adding more pressure on Moscow to handle all aspects of grain deals including transport.
Cargill has said it would continue to ship grain from Russia's ports. It declined further comment.
Last year, Russia exported a record volume of wheat on ships chartered from international companies and traders. While exports remain strong, in the past few months it has had to source more of its own freight, increasingly relying on a "shadow fleet" of older vessels typically operated by companies based in Turkey and China, three shipping industry sources said.
Without the Black Sea corridor in place, both Russia and Ukraine warned in July that ships destined for each others ports could be treated as legitimate military targets, which three marine insurance source said was a further blow to Western companies' risk appetite.
Russia's Black Sea terminals handle about 70 per cent of the country's grain exports. They include the Novorossiisk and Taman ports.
"Russia's agriculture ministry forecast grain exports will fall eight per cent during the 2023/24 season from Russian last year's high of 60 million tonnes.
The ministry in December announced a plan to build a fleet of 61 new grain ships, citing "sanctions pressure and the refusal of many international carriers to cooperate with Russia".
Russian exporters need 34 grains ships with a carrying capacity of 60,000 tonnes and 27 with capacity of 40,000 tonnes, the ministry said in December. It did not say when they could be built by Russian shipyards.