Ukraine sets up temporary shipping route to maintain grain exports

Ukraine is aiming to establish a temporary shipping route to maintain grain shipments after the Black Sea Grain Agreement expired on July 17 without being renewed.

A ship carrying Ukrainian grain passes through the Bosphorus Strait in Istanbul, Türkiye on August 3, 2022.

In a letter dated July 18 to the UN shipping agency, the International Maritime Organization (ISO), Ukraine announced its decision to establish a temporary base for a proposed sea route. The purpose of the decision is to facilitate the opening of international shipping in the northwestern part of the Black Sea, Ukraine’s acting Minister of Communities, Territories and Infrastructure Development Vasyl Shkurakov said.

In the letter, Ukraine also said that the proposed shipping route passes through the territorial waters and exclusive economic zone of Romania, one of Ukraine's neighbors on the Black Sea.

Following the expiration of the Black Sea Grain Agreement, Ukrainian President Volodymyr Zelenskiy said Kiev is evaluating options to maintain grain shipments and ensure foreign supplies. Insurance companies are also reconsidering the provision of ship insurance to Ukraine.

Reuters (UK) quoted a source familiar with the matter as saying that a cargo insurance scheme for shipping through the Black Sea Grain Deal routes has been suspended. The conflict risk insurance premium, which is applied when ships enter the Black Sea, is updated every seven days. The cost has reached thousands of dollars and is expected to increase while shipowners are also hesitant to sail into conflict waters.

German Foreign Minister Annalena Baerbock said on Twitter on April 19 that Berlin would support Ukraine as it considers all other grain export options to replace the routes that have been temporarily closed after the above agreement expires. Ms. Baerbock proposed a number of "solidarity" routes of the European Union (EU) by road, rail and water to replace the old routes. She stated that through this initiative, the EU is committed to continuing to transport agricultural products from Ukraine to international markets.

An alternative route is being considered a possible waterway via the Danube River, which runs along Ukraine’s southwestern border with Romania. However, some neighboring countries are calling for Europe to extend the ban on Ukrainian grain imports, fearing increased competition with domestic agricultural products.

According to a VNA correspondent in Europe, on July 19, the heads of the agricultural sectors of five neighboring countries of Ukraine in the Central European region, including Bulgaria, Hungary, Slovakia, Romania and Poland, attended a meeting in Warsaw to discuss the above ban. Speaking after the meeting, the host's Agriculture Minister Robert Telus said that these countries want to extend the ban on grain imports from Ukraine until at least the end of 2023. Accordingly, the parties attending the meeting have prepared and signed a memorandum of understanding on a common stance regarding the extension of the ban on imports of four types of Ukrainian grain into the markets of these countries after September 15. However, the common view of the countries is still to allow the transit of the above grains.

Earlier in May, the EU allowed the five member states to ban the sale of wheat, corn, rapeseed and sunflower seeds imported from Ukraine on the domestic market, and to allow the transit of these items to other regions for export. This ban will expire on September 15. Polish Prime Minister Mateusz Morawiecki also announced that the border will not be opened to Ukrainian grain after September 15, emphasizing that "either the European Commission (EC) will agree to extend this ban, or Poland will do it itself". However, he also affirmed that Warsaw will allow Ukrainian grain to transit Polish territory.

(According to Baotintuc.vn)

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