A clock runs inside the multi-storey warehouses on the port of Odessa, on the Black Sea, on the coast of Ukraine.
A large metal structure alone contains a quarter of a million tons of grain, but accounts for just over 1% of the estimated 20 million tons trapped in Ukraine since the Russian invasion began in late February.
Hundreds more of these “grain elevators” are scattered throughout the world’s fifth-largest wheat-exporting country: along roadsides, rail terminals, and ports. However, still full of last year’s harvest, these towers are now almost within reach.
In just over a month the spring harvest begins, when farmers begin to harvest winter wheat, which will have to go to the Ukrainian grain silos. Meanwhile, inflation is rising, countries like India are blocking wheat exports and the risk of hunger is rising.
Due to the large quantities involved, most Ukrainian grain has always been transported by sea
Pressure is mounting for an international agreement on a Ukrainian grain rescue mission, which is desperately needed to feed the world, and which Kyiv wants to sell urgently to have a vital foreign currency in its hands. Ukraine produces up to half of the world’s sunflower seeds, one-tenth of its wheat and up to one-fifth of barley and rapeseed.
In addition to a major diplomatic effort, rescuing Ukraine’s grain also poses a logistical challenge. Given the large quantities involved, most Ukrainian grain has always been transported by sea rather than by road or rail.
Turkey, which has authority over maritime traffic entering and leaving the Black Sea, is believed to be leading talks with Russia on proposals to allow grain vessels from Ukraine through a naval corridor to the Bosphorus.
However, several issues need to be addressed to ensure the safe transportation of Ukrainian crops, beyond international agreements, from the capacity of ships and crew to the availability of insurance.
When Russia launched its full invasion of Ukraine, it blocked the country’s Black Sea ports, including Odessa, preventing any ships from entering or entering ports. In addition, the surrounding waters have been filled with floating mines. Water demining would be necessary for any type of grain corridor.
Then there is the challenge of finding the navy to transport the grain. Agricultural products move between continents in bulk cargo ships, which can hold up to 50,000 tons, dumped in several large compartments of the ship’s hold.
Estimating that 20 million tonnes of grain would be transported would require up to 400 suitable vessels.
However, shipping analysts say the availability of ships should not be a limiting factor, although it would take some time for these bulk carriers to redirect and sail to the Black Sea from their current locations.
“Before the war, more than 90% of all Ukrainian agri-food exports were made by sea,” said Mariia Didukh, director of the National Agrarian Forum of Ukraine, which represents the country’s largest food-producing organizations.
Export figures underscore the magnitude of the challenge: before the war, between 5 and 6 million tonnes of grain were exported each month from Ukrainian seaports, according to the International Grains Council, an intergovernmental organization that seeks to promote cooperation in world trade in cereals.
In just over a month the spring harvest will begin in Ukraine. Photo: Khaled Elfiqi / EPA
According to Didukh, only one-fifth of normal monthly export levels have been transported abroad by alternative means during the first three months of the war, accounting for only 1.2 million tons of grain, turnip oil. sun and all other agricultural exports.
“We have been developing alternative routes for export, such as railways, trucks and some Danube ports to Romania,” he said. “It is more expensive by rail or by truck, it is longer and has very, very small capacities. It’s unrealistic for us. “
The railway and the road are also full of logistical challenges. Ukraine’s railway network has, like Russia, a slightly wider width, or distance between the two rails of a railway, than its European neighbors such as Poland or Romania.
This means that the grain transported by rail must be unloaded and taken on a different train when it reaches the European borders of Ukraine.
The Guardian understands that three Ukrainian ports are being considered for grain ship departures: not only Odessa, but also the neighboring ports of Yuzhne to the west and Chornomorsk to the east.
A source from the shipping company working in Ukraine said that much needs to be done to ensure the safety of any transport, once the sea near the coast has been swept away by mines, including the provision of adequate insurance to cover the ship and crew.
According to the source, even Russian government guarantees to ships using the naval corridor might not persuade all shipowners to carry out a mission.
“There is a lot of money to be made and some companies are more relaxed to take more risks,” the source said.
Sign up for your Daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
The availability of war insurance, to cover both the ship and the crew, will also be a determining factor in the success of any grain runner.
The influential London-based Joint War Committee designated the Russian and Ukrainian waters of the Black Sea and the Sea of Azov as “cataloged areas” in February, meaning shipowners should warn insurers if they travel. there. This also means that additional premiums are charged.
Even if proper “war insurance” could be taken out, some representatives of the shipping industry are not convinced that a grain corridor can be organized quickly.
“I think that’s an unlikely prospect at the moment. You have to make sure your ship isn’t going to be the target,” said Guy Platten, secretary general of the International Navigation Chamber.
“So many things would have to be put in place before any shipowner could take the lease, and they would need so many guarantees before the ships could move up there.”
He added that about 100 ships and 2,000 crew with 20 different nationalities were “in the wrong place at the wrong time” when Russia invaded and have been trapped in Ukrainian ports ever since. It has taken time, but now more than three-quarters of these sailors have been evacuated to a safe place, although some 450 remain on board.
Ukraine’s agricultural industry and food analysts estimate the world has 10 weeks to find a solution
“There are a lot of steps that need to be taken before ships can be traded there again, and there will be big premiums,” Platten said. “All shipowners will look at the risk and the reward.”
As international talks continue, the clock is ticking. Ukraine’s agricultural industry and food analysts estimate that the world has 10 weeks to find a solution, before the spring harvest has to take its place in the country’s grain silos.
Discussions on time pressure are likely to dominate at the annual meeting of the International Grains Council, which has Russia and Ukraine as members, when it meets in London on Tuesday.
Failure to organize a grain corridor could also have lasting repercussions for countries such as Egypt, which depend on Ukrainian imports.
Egypt depends on the supply of grain from Ukraine. Photo: Khaled Elfiqi / EPA
“The question will be for the harvest of the 23rd,” said Arnaud Petit, executive director of the International Grains Council.
“If Ukrainian farmers see that Ukraine’s export capacity is very limited, they will limit production for the ’23 harvest, and that would mean that we are observing not just one year but two years of market disruptions, that would be the worse than the case. “