First Ukraine grain ship reaches safe waters, others set to arrive

The first ship carrying grain from Ukraine’s deep-sea ports has successfully moved to safe waters and is heading into Istanbul for inspections, while further vessels are preparing to arrive in Ukraine.

The Razoni, which is on a test journey carrying 26,000 mt of corn, left Ukraine’s port of Odesa Monday and is currently in the Black Sea, according to tracking service Marine Traffic.

At the same time, trade sources said another vessel that is on its way to Ukraine – a bulker called Osprey S with a 30,570 mt deadweight – is now halfway through its journey and is expected to arrive in Chornomorsk by August 5, according to Marine Traffic.

This comes after last week the first selling indications appeared in the market on a FOB Pivdennyi/Odesa/Chornomorsk (POC) basis in the market for both wheat and corn, although those were seen by market observers as merely price ideas, as freight availability is still questionable.

It also follows a tender for Ukrainian wheat launched by the World Food Program last week, in which Cargill reportedly sold 30,000 mt of 11% milling wheat at $340/mt FOB POC, the first deal on this basis since Russia invaded Ukraine on February 24.

Freight sources were not able to give an exact price for freight rates from Ukraine, as it is still hard to get an idea of the insurance costs, but at the same time, many have agreed that the premium over will be at least at $35-40/mt for a handy vessel.

Ukraine signed an agreement with Turkey and the UN on July 22, while Russia signed a mirror agreement, paving the way for the first vessels carrying agriculture products to leave Ukrainian deep-sea ports since February.

Ukraine has been sitting on grain stocks of at least 16 million mt of wheat and corn alone, having harvested a record grain crop in the 2021/22 marketing year that it subsequently could not export abroad after the Russian invasion blocked its deep-sea ports.

Despite the difficulties and ongoing war, Ukraine is still on its way to harvesting a decent crop in the 2022/23 marketing year, with wheat production estimated at around 19-20 million mt and corn at around 26-27 million mt.