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Black Sea Watch: Grain flows ease on month as inspection delays remain unresolved


Daily average Ukrainian seaborne grain flows tread 15% lower on month

JCC issues warning over non-compliant vessels

Cargo size persists above average

  • Author
  • Nikolaos Aidinis Antonopoulos
  • Editor
  • Nikolaos Aidinis Antonopoulos
  • Commodity
  • Agriculture Shipping

Seaborne flows through the Black Sea grain corridor have averaged 102,051 mt/d over Jan. 1-28, 15% lower than December, an analysis of the UN's Black Sea Grain Initiative Joint Coordination Centre data by S&P Global Commodity Insights found Jan. 30.

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"Unless JCC inspections speed up, flows will not be improved," a chartering broker from Odesa said. "We will continue as is."

During the period Jan. 23-28, daily average grain flows eased to 101,295 mt/d, according to JCC data, 21% below the average during week 3.

Freight rates for a trip from Odesa or Novorossiisk to Alexandria were close to $20/mt for a 60,000 wheat cargo for Egyptian sector importers and about $26/mt for Egypt's General Authority for Supply Commodities (GASC), according to a Panamax market source active in East Mediterranean markets.

The UN-brokered Black Sea Grain Initiative -- signed last July by Russia, Ukraine and Turkey and renewed in November for another four months starting Nov. 19 -- enabled the resumption of exports of grains and other foodstuffs from the three key Ukrainian ports of Chornomorsk, Odesa and Yuzhny/Pivdennyi on the Black Sea.

Grain shipments under the safe passage deal reached 18.94 million mt as of Jan. 28, according to JCC data.

The JCC has noted a series of non-compliance events during week 4, pointing to the obligation of inbound vessels heading to Ukraine to have completed actions such as refueling and resupplying, crew changes, and hull cleaning before going through the inspection process, with the outbound vessels required to go through inspections before completing the above actions while in the Turkish Inspection Area, according to an operational update Jan. 26.

"The non-compliances have not contributed to the delays," a UN spokesperson told S&P Global.

Meanwhile, the average cargo size has also eased to just below 38,000 mt for Jan. 23-28, down 19% from the average size observed during week 3, albeit still holding some 31% higher than the longer term weekly average since the opening of the corridor in August.

In terms of cargoes, corn dominated shipments last week, accounting for over 55% of the 607,771 mt of total flows during the period Jan. 23-28, compared to 47% during week 3, data from the JCC showed, with wheat claiming a 36% portion, from about 32% during week 3.

Indeed, the largest shipment during the period Jan. 23-28 was a 69,756 mt corn cargo, aboard the Tutor and headed to Israel, having previously departed the terminals of Yuzhny/Pivdennyi Jan. 27.

The geographic dispersion of the destination countries came in much wider during the period Jan. 23-28, with both the Europe and Central Asia region, and the East Asia and Pacific region, each attracting about just 22% of the total flows.

Notably, the bulk of the Ukrainian Black Sea grain flows during the period Jan. 23-28 was destined for Middle East and North Africa, accounting for 36% of the flows, with South Asia and Sub-Saharan Africa claiming slightly less than 10% each.

Still, high-income markets managed to secure 52% of Ukraine's Black Sea grain flows during the period Jan. 23-28, JCC data showed, with another 29% headed to upper-middle-income destinations.