Black Sea Grain Disruptions Send Global Shipments Plummeting

Global grain shipments have fallen by 8% year-over-year over the last five weeks (weeks 29-33) due to a significant drop in exports from the Black Sea. The region's grain trade has been disrupted by increased attacks on ships and port infrastructure by Russian and Ukrainian forces.

The situation escalated on July 6, when Ukraine launched Operation MoLoChKa, targeting Russian-linked ships in the Sea of Azov and expanding into the Black Sea. Russia subsequently intensified its attacks on Ukrainian ports and merchant vessels, causing many shipowners to suspend calls at Ukrainian ports.

While Black Sea ports account for only 3% of global dry bulk seaborne exports, they play a larger 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.

Russia has started redirecting its grain cargoes to alternative export routes, including overland routes, 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.