First hurdle for Ukraine grain deal ‘is clearing stuck ships’

Bloomberg

Now that Ukraine’s grain-export deal has been signed, all eyes are on clearing a major obstacle: freeing the scores of ships stuck there since February. As many as 100 vessels carrying grain and agricultural products were trapped in Ukrainian ports when Russia’s invasion began, and seeing them sail would mark a first step in revitalizing seaborne trade. But even with a deal, traders say freight for new sales is difficult to nail down, with risks to insurers and shippers still lingering.
Liberating the stuck ships would start to establish a standard on how the new corridors operate, said Ilya Medvenko, finance director at Barens Group, a private investment firm involved in Ukrainian agriculture trade. The United Nations expects the first to move within a few days, and an adviser to global insurers proposed a mechanism that might help cover the trade.
For some ship owners, “one of the ways is to operate without a particular insurance, but even those are waiting to see when the precedent will be set and vessels start leaving the port area,” Medvenko said in an interview. “Only then, they’ll establish the freight price and go from there.”
Wheat and corn futures in Chicago extended gains Tuesday as traders wait to see how far the deal goes toward restoring Ukrainian grain shipments. Attacks by Russian forces on the port of Odesa over the weekend also cast doubt on how quickly sales can resume. In response to the pact, the Joint War Committee, invited underwriters to participate in what it called a “special market facility” to support grain shipments.