OCEAN cargoes find their way to buyers, no matter the obstacle, like water drawn by gravity around a stone. Case in point: Ukraine grain exports have continued to flow despite crops and ports being in a war zone.

Volumes are up significantly since the demise of the original Black Sea corridor backed by Russia, and are now approaching pre-war levels.

The war has blocked Ukrainian grain exports from the Black Sea ports of Mykolaiv and Kherson, prompting increased exports through the country’s remaining three Black Sea ports — Odesa, Chornomorsk and Yuzhnyi — as well as via the Danube river.

The Russia-backed grain export corridor expired in July 2023. Since then, Ukraine has been exporting grain using its own corridor, which skirts close to the country’s coast and passes through the territorial waters of Romania, Bulgaria and Türkiye.

According to data from Lloyd’s List Intelligence*, the total capacity of all foreign grain vessels arriving in Ukraine during Q124, including Black Sea ports and the Danube, was 25.1m dwt, a 78% surge from the same period in 2023, when the Russia-backed corridor was in place.

Capacity of inbound grain carriers was down only 4.7% compared with Q121, prior to Russia’s invasion. Shipping capacity in the Black Sea in Odesa, Chornomorsk and Yuzhnyi, as well as in the Danube, has mostly – but not entirely – compensated for the loss of access to Mykolaiv and Kherson.

The number of foreign grain ships arriving in Ukraine is much higher than pre-invasion, driven by loadings in the Danube and smaller average parcel sizes.

There were 1,312 grain ship arrivals in Q124, up 31% from the same period last year and up 33% from Q121, pre-invasion, according to Lloyd’s List Intelligence.

Grain ships calling in Ukraine had an average age of 21.5 years in Q121. This spiked to 31.7 years in Q123, then modestly declined to 27.5 years in the latest quarter, according to Lloyd’s List Intelligence.

Ship age increased during a period when operators were most concerned about war risk to vessels and crew. Falling age implies operators are becoming a bit more comfortable with the new Ukrainian corridor, albeit not to the extent they were before the war.

Ukraine grain shipping corridor is a success

The fear in the immediate aftermath of the invasion, and again after the collapse of the original grain corridor plan, was that the war would jeopardise global food supply. Those concerns have proven unfounded. Ukraine has largely maintained its exports of corn and wheat, and Russia has significantly increased its own exports of wheat.

“There was panic when Russian invaded Ukraine, but Russian grain was never going to be sanctioned,” Jay O’Neil, head of HJ O’Neil Commodity Consulting, told Lloyd’s List.

“There was also the fear that if the Russian’s didn’t support the grain corridor, it would shut trade down. But it didn’t.

“The Ukrainians developed their own corridor closer to the shoreline and, son of a gun, it’s working. To pretty much everyone’s surprise, trade is back to where it was pre-war. There are enough vessel owners willing to go there and that’s satisfying the need.”

The US Department of Agriculture expects Ukraine to export 24.5m tonnes of corn in the 2023-2024 marketing year, down 10% from the prior period but up 3% versus 2021-2022. The USDA forecasts Ukrainian wheat exports will be 17.5m tonnes in 2023-24, up 2% from 2022-23 and up 4% versus 2021-2022.

The biggest driver of Black Sea grain shipping is wheat cargoes out of Russia, according to the USDA. It expects Russian wheat exports to total 52m tonnes in 2023-2024, up 9% from the prior marketing year and up 33% versus 2021-2022.

‘Black Sea grain market has beaten expectations’

Ship brokerage BRS, citing data from AXSMarine, reported that Ukraine shipped 12.3m tonnes of grain via the Black Sea in Q124, up around 20% over the same period in 2023. Russia exported 12.1m tonnes of grain via the Black Sea in Q123, compared with 12.3m tonnes the year before.

“The Black Sea grain market has beaten expectations, as exports are showing unexpectedly strong volumes, supported by Ukraine’s shipments’ resilience,” said BRS.

Argus dry bulk analyst Andrey Telegin told Lloyd’s List that Ukrainian grain exports have been “pretty much the same” since the end of the Russia-backed corridor.

“The war risk premium rose when the original corridor was not prolonged after July 2023, but since the new corridor was established and has proven its safety, the premium has decreased a bit.”

According to Telegin, Ukrainian grain is being shipped to Türkiye, China, Egypt, Iran, Spain, the Netherlands, Italy, Israel and Bangladesh, among other destinations. Cargoes to the Med and Europe are mostly carried on handysizes, with those bound for the Asia-Pacific on panamaxes, kamsarmaxes and supramaxes.

Ships calling in Russia first are not discriminated against in Ukraine, he noted.

“Ukrainian charterers are usually okay with Russian callers. A lot of vessels discharge coal in Türkiye from Ust-Luga and Murmansk, and then go to Ukraine to pick up grain.”

Another interesting aspect of the market: Both Telegin and BRS pointed to a preponderance of Red Sea transits for cargoes out of the Black Sea.

“Most of the shipments passing via the Suez Canal have loaded in the Black Sea,” said BRS.

According to Telegin, “Ukrainian and Russian charterers mostly go to the Asia-Pacific via the Suez, while most other bulkers — literally 99.99% of non-Russian and non-Ukrainian bulkers — are rerouting via the Cape of Good Hope.”

*Most vessels disabled their Automatic Identification System data to call at Ukraine in the first months of the ports reopening. Lloyd’s List Intelligence has conducted an analysis to catch these “dark” port calls and this information is accurate to the best of its knowledge.