Ukraine closes its ports, conflict threatens grain supply

Operations at Ukraine’s seaports have been suspended by the country’s military forces, said Mykhailo Podolyak, adviser to the chief of staff, as concern grows over the flow of supplies from one of the world’s top grain and oilseed exporters.

Earlier in the day, Ukrainian grain industry officials and executives said Russia had halted ship movements in the Sea of ​​Azov, though it had kept Russian Black Sea ports open to shipping.

Russian President Vladimir Putin on Thursday authorized “a special military operation” against Ukraine to remove what he called a serious threat, saying its goal was to demilitarize its southern neighbor.

“The market still does not have a clear idea of ​​the real military situation on the ground. The Sea of ​​Azov and Black Sea ports do not seem to have been damaged so far, according to the first reports from shipping agencies,” declared a European grain trader.

“The next stage that will have to be dealt with is the possible declarations of force majeure, if the ships cannot be loaded and the contracts cannot be fulfilled,” he added.

Russia, the world’s largest wheat exporter, ships its grain mainly from Black Sea ports.

The Sea of ​​Azov hosts smaller capacity shallow water ports.

Maripol, the most important Ukrainian port on the Sea of ​​Azov, mainly caters to relatively small vessels between 3,000 and 10,000 deadweight tons.

Sea of ​​Azov ports mainly export wheat, barley and corn to Mediterranean countries such as Turkey, Italy, Cyprus, Egypt and Lebanon.

Russia and Ukraine account for 29% of world wheat exports, 19% of world maize supplies, and 80% of world sunflower oil exports.

Russia produced 76 million tons of wheat last year and the US Department of Agriculture expects it to export 35 million tons in the July-June season, 17% of the world total.