Ukraine war: Russia blocks ships carrying grain exports | Business | Economy and finance news from a German perspective | DW | 17.03.2022

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Ukraine war: Russia blocks ships carrying grain exports

Up to 300 ships have been stopped by Russian forces from departing the Black Sea, leaving one of the key global trade routes for grain virtually blocked. The fertile region is known as "the world's breadbasket."

 The Moscow missile cruiser is seen during Naval drills in the waters of the Black Sea coast of Crimea, Russia.

Russia's Navy is blocking scores of ships, many carrying grain exports, from leaving the Black Sea

Wheat exports from Ukraine and Russia, which make up a vital part of the world's food supply are still being blocked by Russia from leaving the Black Sea, Germany's largest agricultural trader BayWa said this week.

"Zero [grain] is currently being exported from the ports of Ukraine — nothing is leaving the country at all," Jörg-Simon Immerz, head of the grain trading at BayWa, told dpa news agency.

He added that the export activity on the Russian side is "very limited."

Immerz's assessment was backed up by the Panamanian Maritime Authority, who said on Wednesday that the Russian Navy was preventing 200-300 ships from leaving the Black Sea — most of them were carrying grain. Other reports suggest around 100 vessels are blocked.

Noriel Arauz, the administrator for the authority, said three Panamanian-flagged ships have come under Russian fire since the invasion of Ukraine started. One of the ships sank and two others were damaged, while no one was injured.

British newspaper The Guardian reported that several other ships have been struck since the invasion began on February 24, including from Bangladesh and Estonia, which killed one person.

Russia blames the stoppage on the high risk of mines, which it said had been laid by the Ukrainian Navy.

Global worries about wheat deliveries

Food security threatened

Questions have been raised about how much grain Ukraine will be able to produce this year due to the conflict. At the same time, Russia has vowed to retaliate against Western sanctions that have crippled its economy.

Curbs on wheat and fertilizer exports are presumed to be high on Moscow's list, which could have further consequences for the world's food supply and food price inflation.

Russia produces close to 80 million metric tons of wheat a year and exports close to 30 million tons, while Ukraine exports about 20 to 25 million tons a year.

Infografik Führende Weizenproduzenten weltweit EN

BayWa's Immerz said the entire market is following Ukraine's exports more than Russia's as they are currently deemed to be more at risk. 

"The wheat was sown in the fall and now needs to be fertilized," Immerz said. "The corn hasn't even been sown yet, and if that can't be sown, of course, there will be no crop."

Days after the invasion, Ukrainian President Volodymyr Zelenskyy urged farmers to begin the sowing season as normal, where safe to do so.

BayWa, meanwhile, believes there is no reason to fear a wheat shortage as much more wheat is harvested in the EU than is consumed.

"The EU exports about 30 million metric tons of wheat annually, and Germany is also an exporter in normal years," Immerz said. But that is not true for all types of grain. "We rely on imports for corn," he added.

A Cargo crane, ship and grain dryer in the port of Odessa, Ukraine

The port of Odessa (pictured) is one of the main departure points for Ukraine's grain exports

Africa's food needs vulnerable

Meanwhile, a new report by the United Nations Conference on Trade and Development (UNCTAD) has warned about the impact of the war on the food situation in Africa.

Between 2018 and 2020, Russia accounted for nearly a third of wheat imports to the continent, while around 12% come from Ukraine.

The UNCTAD report said up to 25 African countries, especially the least developed economies, relied on wheat imports from Russia and Ukraine.

The lack of spare capacity in Africa limits the chances of offsetting any lost supplies, while surging costs for fertilizer will be an extra burden for farmers, the UN warned.

Meanwhile, rising costs for shipping and for grains and other staple foods are pushing prices higher, hitting the poorest people the hardest, the report said.

Macron: Ukraine war threatens food security in Europe, Africa

Safe shipping corridors needed

The United Nations' International Maritime Organization (IMO) has called for so-called blue corridors to allow the ships to leave the Black Sea without the risk of attack or hitting a mine.

"The ongoing military action in the Black Sea and the Sea of Azov presents a serious and immediate threat to the safety and security of crews and vessels operating in the region," IMO said in a statement released earlier this week.

"The seriousness of the situation is underlined by a growing number of open-source reports of security incidents involving merchant shipping," it added.

IMO is currently liasing closely with all key stakeholders in the region to "contribute to attempts to address the safety and security of shipping" in the Black Sea region.

Edited by: Uwe Hessler