The Russian government said on Saturday that it is suspending the operation of a United Nations-led safe passage scheme for Ukrainian grain in the Black Sea.
Moscow said it took the step after a Ukrainian drone attack on its warships earlier on Saturday at Sevastopol in Russian-occupied Crimea.
“The Russian side cannot guarantee the safety of civilian dry cargo ships participating in the ‘Black Sea Initiative’, and suspends its implementation from today for an indefinite period,” the Russian foreign ministry said in a statement on its website translated from Russian.
”Appropriate instructions were given to Russian representatives at the Joint Coordination Centre in Istanbul, which controls the transportation of Ukrainian food.“
Moscow blamed Ukraine of having used the Black Sea [Grain] Initiative as a cover to carry out the attack, launching “massive” drone strikes against its fleet in Sevastopol.
According to Moscow, the Russian warships had been used to protect grain convoys as part of the corridor.
Ukraine foreign minister Dmytro Kuleba reacted on Twitter on Saturday, accusing Moscow of playing “Hunger Games”.
“We have warned of Russia’s plans to ruin the Black Sea Grain Initiative,” Kuleba said.
“Now Moscow uses a false pretext to block the grain corridor which ensures food security for millions of people. I call on all states to demand Russia to stop its hunger games and recommit to its obligations.”
Under the terms of the Black Sea Grain Initiative agreed at the end of July, empty inbound and laden outbound ships are vetted by UN, Turkish, Russian and Ukrainian officials in Istanbul to check documentation and make sure there are no weapons or unauthorised cargo and personnel on board.
According to the latest UN figures, 8.7m tonnes of grain and foodstuffs have left the Ukrainian ports of Odesa, Chornomorsk and Pivdennyi under the scheme over 383 ship voyages.
The deal was set to expire on 22 November and talks were underway to renew it.
Speculation that the agreement might not be extended had intensified, however, as its initial expiration deadlines neared and the Ukraine war turned against Russian President Vladimir Putin.
Ukrainian President Volodymyr Zelenskyy last week blamed Russia for dragging its feet over the deal, leading to about 150 ships being clogged in the Bosphorus, waiting for surveyors to inspect them.
Clear as mud
Following Russia’s announcement of suspending the deal, the commercial situation for the vessels currently carrying Ukrainian grain cargo, or for those that have been chartered to do so in the future, remains unclear.
One shipping source involved in the Ukrainian grain trade suggested that laden ships waiting in Istanbul will probably be allowed to sail through and reach their destinations.
As for future loads, there is speculation that a new NATO-protected corridor might be in the works. Such an option, however, would raise the question of higher insurance premiums.
Turkey, which has been trying to steer a neutral course between Russia and Ukraine and was instrumental in negotiating the UN deal, may also be against it.
In the months that it operated, the Ukraine grain trade under the UN scheme provided a welcome opportunity for dozens of ships that had been trapped in Ukraine when Russia invaded the country on 24 February, to get out.
In the weeks that followed its implementation after 1 August, the Ukraine trade also represented a lucrative employment for bulkers, paying above-average freight rates for vessels that carried grains under the scheme.
Handysizes involved in the trade Ukrainian were said earlier this month to be earning at least $3,000 to $4,000 per day compared with industry averages — net of heightened insurance payments.
This is a considerable premium, especially for the kind of smaller and older cargo ships usually involved in the trade.
On 28 October, Greek brokers reported two fixtures for Ukrainian grain voyages at elevated levels.
They said Cargill fixed the the 60,300-dwt Ellirea (built 2017) for a spot trip via Ukraine at $38,000 per day. Separately, Admi is said to have fixed the 32,600-dwt Bosphorus Asia (built 2002) for a spot trip via Ukraine, delivery Marmara and redelivery Ravenna, at $37,000 per day.
Russian frustration with the deal had increased in recent weeks. Earlier this month, Putin said that Russia has been “screwed over” by the deal.
The Russian president particularly criticised the fact that most of Ukraine’s grain exports under the scheme were destined for developed countries rather than relieving hunger in the third world.
However, Russian officials also wanted the deal to go hand in hand with a lifting of sanctions that would facilitate Russian exports as well.
In a press briefing on 27 October, Russian foreign ministry spokeswoman Maria Zakharova reiterated the grievances, warning that Moscow could block the deal’s extension next month.
“Bank accounts have been blocked. Transactions cannot be carried out because payments cannot be made. They have been blocked by Western sanctions,” Zakharova said, according to a transcript of the briefing on the website of the Russian foreign ministry.
“We would be supplying products and being paid for them. This is not happening. Accordingly, we have until November 18 to decide on our future actions based on factual data,” Zakharova said.
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