HAMBURG- International and local traders started to offer more Ukrainian-origin grain for sale on Friday as news of the first shipment from the country since Russia’s invasion boosted confidence in a deal to unblock exports from its sea ports.
Prices were discounted, with roughly 20 million tons of grain from last year’s crops still stuck in the country.
Diplomatic efforts have focused on finding a way to transport around 1.5 million tons of grain loaded on ships or housed in port storage and millions more in silos across the country, as well as massive volumes from the ongoing harvest.
The July 22 deal brokered by the United Nations and Turkey paved the way for the resumption of grain shipments from Ukraine after U.N. agencies warned a growing global food crisis would lead to starvation and mass migration on an unprecedented scale.
“I think there is more optimism growing, especially with the news that the first empty ship is going to Ukraine to pick up cargo,” a European trader said. A Turkish bulk carrier was expected to arrive in the Ukrainian Black Sea port of Chornomorsk on Friday.
Traders said offers included a consignment of 50,000 tons of Ukrainian 11.5 percent protein milling wheat for August shipment at $310 a ton on a free on board (fob) basis from Chornomorsk, and another consignment of 30,000 tons for loading in one of the safe corridor ports at $320 a ton fob.
Prices offered are about $10-$20 cheaper than those of Russian 11.5 percent milling wheat from Russian Black Sea ports.
A foreign-flagged ship arrived in Ukraine on Saturday for the first time since the war started in February, and will be loaded with grain, Ukrainian Infrastructure Minister OleksandrKubrakov said.
Ukraine is starting to resume grain exports in an effort overseen by a Joint Coordination Centre in Istanbul where Russian, Ukrainian, Turkish and U.N. personnel are working.
The United Nations and Turkey brokered a deal after U.N. warnings of possible outbreaks of famine due to a halt in grain shipments from Ukraine. Before the invasion, Russia and Ukraine together accounted for nearly a third of global wheat exports.
Kubrakov said the Barbados-flagged general cargo ship Fulmar S was in the Ukrainian port of Chornomorsk.
“We are doing (everything) possible to ensure that our ports can receive and handle more vessels. In particular, we plan to reach the level of at least three to five vessels per day in two weeks’ (time),” he wrote on Facebook.
Ukrainian President VolodymyrZelenskiy said the resumption of exports was positive, adding that security risks remained.
“The threat of Russian provocations and terrorist acts remains. Everyone should be aware of this,” he said in a late-night video address on Saturday.
“But if our partners fulfill their part of the commitment and guarantee the security of supplies, this will really solve the global food crisis.”
Ukraine eventually aims to ship out 3 million tons a month from its Black Sea ports, Kubrakov said.
“This event is an important market signal that the (grain shipment deal) is a safe and, most importantly, profitable business opportunity for ship owners to return to Ukrainian ports,” he added.
Roughly 20 million tons of grain from last year’s crops are still stuck in the country.
There were roughly 70 ships stranded in Ukraine when the conflict began in February, some of which had already been loaded with grain. The first left the port of Odesa for Lebanon on Monday and three more were scheduled to leave on Friday.
Most deals to buy grain from Ukraine were cancelled after the invasion, so sellers need to find new homes for the cargoes, traders said.
Ukraine’s Seaport Authority earlier this week said 480,000 tons of wheat, vegetable oil and corn had been loaded onto ships at the three ports currently involved in the safe corridor scheme, Pivdenny, Odesa and Chornomorsk.
Another million tons of grain is stored in grain terminals and warehouses of Ukrainian ports, the authority said.
The vast majority of the nation’s stockpiles, however, are spread across the country, with farm silos crammed full and farmers repurposing cow barns and workshops to store supplies.
Transporting them to ports may prove challenging as the war continues.
Egypt, typically the world’s largest wheat importer, relies heavily on imports from the Black Sea region, and its General Authority For Supply Commodities (GASC) had around 300,000 tons of Ukrainian wheat booked for February and March delivery.