Concerns over grain supply disruption after Russia invades Ukraine
Monday, February 28, 2022
Ukraine's commercial shipping has been suspended at its ports after Russian forces invaded the country, an adviser to the Ukrainian president's chief of staff said, stoking fear of supply disruption from leading grain and oilseeds exporters, Reuters reported. Earlier, Russia ordered the Azov Sea closed to the movement of commercial vessels until further notice, but kept Russian ports in the Black Sea open for navigation.
Shipping group Maersk said on Thursday it had halted all port calls in Ukraine until the end of February and has shut its main office in Odessa on the Black Sea coast because of the conflict. Bunge said on Thursday it had shuttered company offices in Ukraine and operations in its Black Sea grains port in Nikolaev, Ukraine, had been suspended. ADM said its Ukraine facilities, including an Odessa export terminal, were not operating.
Ukraine is a major exporter of corn, much of it destined for China and the European Union. It also competes with Russia to supply wheat to major buyers such as Egypt and Turkey. Disruption in grain supplies is expected in the countries where Ukraine exports and the first impact is expected to be in the animal feed market. An impact is also expected in fertilizers and future crops as Russia is a major exporter of nitrogen, potassium, and phosphorus fertilizers. Grain markets globally started the week sharply higher, with wheat up nearly 10%, CRM Agri reported.
“The market is still struggling to get a clear picture about the actual military situation on the ground. The ports in the Azov and Black Sea so far seem not to have been damaged according to the initial shipping agency reports,” one European grain trader told Reuters.
Photo credit: Shipyard photo created by dashu83 - www.freepik.com.jpg.
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