Grain exports by sea?

Few people in the market believed in signing the agreement on Ukrainian grain exports from the Black Sea ports. However, on July 22, Ukrainian and Russian delegations signed the agreement with participation of Turkish and UN representatives. The agreement provides for the possibility of shipments from three deep-sea Ukrainian ports of Great Odesa.

However, the very next day, the port of Odesa came under fire from Russia. None of the other parties of the agreement took measures in response, which allows us to predict the continuation of shelling from Russia.

Grain community remains skeptical about the prospects for shipments. However, the Minister of Agrarian Policy, the Minister of Transport, and some market sources report significant interest and intentions to send grain by sea.

We see the following possible scenario for further development of the situation:

Stage 1. This week (July 25-29) the first caravan of ships, blocked in Ukrainian ports for 5 months, is being formed. The quality of grain in these vessels is not known. However, participation in the first caravan gives ship owners a chance to resume operation of these vessels in the event of a successful exit of the caravan from the ports of Great Odesa.

What’s next? What about the prices? What about grain surplus? Impact on the domestic market?

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