Ukraine’s central bank said this week it expected the Black Sea grain corridor to remain closed until the end of the war.
Ukraine’s central bank says it expects the Black Sea grain corridor to remain closed until the end of Russia’s war on its neighbour.
Deputy governor Serhiy Nykolaichuk said this week that the central bank’s latest basic economic forecast had been drawn up with the expectation that the corridor, established under a UN.-brokered deal that Moscow quit last week, would remain close.
He told a press conference after Ukraine announced its first interest rate cut since June last year that alternative export routes via Central Europe would be key for Ukraine’s grain sector
This is bad news for food prices as Ukraine is a major exporter of wheat.
FNB’s business unit said this week the non-renewal of the Black Sea Grain Deal had elevated global wheat prices. Average international wheat futures for Sep-23 delivery had already increased by 12.7% to $337.45 (R6099) a ton. Domestically, wheat for Sep-23 delivery to South Africa rose by 9% to R6780 a ton.
However, alleviating some of the strain is Romania’s Constanta port – Ukraine’s main alternative route for grain since Russia’s withdrawal from the Black Sea shipment deal, which can handle 25 million tonnes of grain annually.
Even before President Vladimir Putin killed off the UN-brokered Black Sea Initiative on July 17, Constanta had handled roughly a third of Ukraine’s grain exports since the start of the war.
The port of Constanta is the largest in the Black Sea and also the deepest, providing depths of up to 18.5 metres. In addition, Constanta can ship 65 million tonnes of crops and TEU (20-foot equivalent unit) containers a year, double the volume of Odesa.
While the Black Sea corridor accounted for about half of Ukraine’s volumes – 16.3 million tonnes over the past six months — Constanta handled an additional 7.5 million tonnes of Ukrainian grain.
The new 19.3km-long train line between Ukraine’s Rakhiv, Berlebash and the Romanian border will enable freight trains to transport crops to Constanta. Each 30-wagon train can carry 2 100 tonnes of Ukrainian grain.
“Speed is everything,” says Viorel Panait, the port operator Comvex manager and the Constanta Port Business Association president.
Since the start of the war, Comvex has invested €4 million (R78m), said Panait, mainly in new conveyors. Convex is also upgrading its grain storage capacity by 25% to 250000 tonnes.
Meanwhile, Russian President Vladimir Putin this week told African leaders he would gift them tens of thousands of tons of grain within months despite Western sanctions, which he said made it harder for Moscow to export its grain and fertilisers.
“We will be ready to provide Burkina Faso, Zimbabwe, Mali, Somalia, Central African Republic and Eritrea with 25 000 to 50 000 tons of free grain each in the next 3-4 months,” he said.
Source : IOL