Black Sea Disruptions Slash Global Grain Shipments by 8%

Global grain shipments have fallen by 8% over the last five weeks due to increased attacks in the Black Sea. According to Filipe Gouveia, Shipping Analysis Manager at BIMCO, a recent proposal by Ukraine to halt attacks on shipping has been rejected by Russia.

The attacks have intensified since July 6th when Ukraine launched Operation MoLoChKa, targeting Russian-linked ships in the Sea of Azov and expanding into the Black Sea. Many shipowners have suspended calls at Ukrainian ports due to the increased risk.

While Black Sea ports account for only 3% of global dry bulk seaborne exports, they play a significant role in grain trade, accounting for roughly 14% of global seaborne grain volumes. Russia and Ukraine are among the world's largest exporters of wheat and maize, supplying countries in Africa, the Middle East, Europe, and Asia.

As a result of the disruptions, Russia is redirecting cargoes towards overland routes and to ports in the Caspian Sea, Baltic Sea, and Far East. However, these routes may face capacity constraints, particularly on railway links to the Far East where coal exports have already encountered bottlenecks.

Ukraine has also sought alternative export corridors, looking to redirect cargoes to its Danube ports as well as Romanian ports. However, these routes face significant capacity constraints, making them unable to fully replace the volumes normally shipped through Ukraine's Black Sea ports.

The risk of spoilage is growing, with Ukraine's Minister of Agrarian Policy and Food estimating that the country could face a storage deficit of 11m tonnes by November, equivalent to 13% of this year's expected grain and oilseed harvest.