Ukraine Defies Russia by Trying to Revive Black Sea Trade

Ten ships have completed journeys to major Ukrainian ports on the Black Sea without incident in the past few weeks, defying Russia’s threats to target vessels in the area.

(Bloomberg) — Ten ships have completed journeys to major Ukrainian ports on the Black Sea without incident in the past few weeks, defying Russia’s threats to target vessels in the area.

The ships’ passage signals that Ukraine’s daring bet to set up its own trade route after the collapse of a safe-corridor agreed with Russia has paid off. So far the success is mostly symbolic, with ship traffic still requiring cautious maneuvers close to the coast of Bulgaria and Romania as vessels head to Ukraine. 

Russia has previously threatened to treat any ships sailing to Ukraine as potentially carrying weapons, and in August opened fire on one to force it to stop for checks. In July, Russian President Vladimir Putin let lapse an agreement — brokered by Turkey and the UN — that allowed the safe passage of vessels exporting Ukrainian grains and other foodstuffs from three key Black Sea ports. 

Two ships reached Odesa on Sunday and two more ships reached Chornomorsk, according to people familiar with the matter, while ship-tracking data shows that the New Legacy arrived at Pivdennyi the same day. That’s in addition to a further five vessels that already transited the corridor, loaded cargoes and left since September 16, and means vessels have now reached all three deep-sea ports using Ukraine’s temporary corridor. 

Separately, five vessels that had been stuck in Ukraine since the beginning of the war used the same route to leave before any inbound vessels arrived. The voyages are still few compared to the hundreds of trips that took place under the Black Sea Grain Initiative. 

Under the safe-corridor deal, all ships headed to Ukraine had to undergo inspections in Istanbul, and only agricultural commodities were included. While the inspections slowed down trade considerably, far more shipowners were willing to take part as the international backing meant it was considered much safer. Grain exports this September were 50% lower than a year ago.

Ukraine used to export the bulk of its grain from its deep ports on the Black Sea coast prior to the invasion, and iron ore and fertilizers were also shipped from there. Kyiv has redirected shipments via river, road and rail, but Russia has persistently targeted ports with drones.

Read more: Ukraine Reaps a Big Harvest, But War Risks Trapping It at Home

The United Nations continues to engage with Moscow on reviving its safe-corridor deal.

“Risks are higher when no agreement is reached,” said Rebeca Grynspan, secretary-general of the UN Conference on Trade and Development. “The only way to bring down risks is by coming back to an agreement by all parties. So that’s why we continue in our efforts to do so.” 

The cost of insuring ships sailing in such a risky area is also an issue. In a sign that the new strategy is gaining momentum, insurance broker Miller said it was offering “full war risks insurance coverage” for Ukraine Black Sea grain ships. 

That doesn’t necessarily make the journeys less treacherous for crew members. But it could help to make some exports easier for Ukraine’s agriculture sector, which provided employment for over one in ten Ukrainians as of early last year, according to the USDA. It is also an important contributor to global food supplies.

“When Russians pulled out of the grain deal, they thought they could cause more troubles for Ukraine,” said Mykola Bielieskov, a research fellow at the National Institute for Strategic Studies in Kyiv. He expects “the number of vessels heading towards Ukrainian ports will increase.”

–With assistance from Julian Lee.

(Updates with details on ships in first, fourth and fifth paragraphs)

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