Russia attacks export facilities

Russia has launched drone strikes on Ukraine’s Danube ports of Reni and Izmail destroying grain silos and storage capacity as well as stock intended for loading, AgriCensus reported on 24 July.

The Danube is now Ukraine’s main export route for grains and oilseeds since Russia’s 17 July withdrawal from the Black Sea Grain Initiative (BSGI), which had facilitated the safe passage of some 33M tonnes of grain and foodstuffs from Ukraine since it first came into effect in July 2022.

Video posted on social media showed large explosions in Reni port on 23 July, some 5km from the border with Romania, the Guardian wrote on 24 July. Ukraine’s defence ministry also reported a grain silo being damaged at Izmail port following a drone attack on 2 August.

The drone attacks follow a rise in Russian strikes on infrastructure associated with Ukrainian grain exports since Russia's withdrawal from the BSGI, with the Black Sea ports of Pivdennyi, Odessa and Chornomorsk sustaining damage that would take at least a year to fully repair, according to Ukraine Minister of Agrarian Policy and Food Mykola Solskyi.

A significant portion of the infrastructure at the Port of Chornomorsk had been knocked out and 60,000 tonnes of grain

In Brief

RUSSIA: The government is working on amendments to its export policy that would allow a temporary reduction or the elimination of export taxes to countries it regards as “friendly”, AgriCensus reported on 18 July.

If the amendment was approved, export taxes for grains and vegetable oils, along with other commodities Russia typically exports, could be lowered for “friendly countries” from current official levels or removed for a period of up to six months, AgriCensus reported from Russian local media outlet RBC, which quoted a government document.

Russia’s main export destinations for agricultural products in 2022/23 were to Egypt, Iran, Saudi Arabia and Turkey, AgriCensus wrote.

destroyed, World Grain reported the minister as saying.

Reuters reported Ukrainian officials as saying that Moscow had hit 26 port facilities, five civilian vessels and 180,000 tonnes of grain in nine days of strikes since quitting the grain deal.

Vessel risk

Insurance companies were unlikely to risk covering vessels transiting the Black Sea following Russia’s withdrawal from the BSGI, AgriCensus wrote on 21 July.

“Now that the Russian authorities have declared that any vessel sailing to Ukrainian ports will be treated as a military threat, it is unlikely that underwriters will want to cover that risk,” a spokesperson at the International Union of Marine Insurance (IUMI) said in an e-mail. “Similarly, it is unlikely that owners/charterers will be willing to put their vessels and crew in danger.”

Russia’s Ministry of Defence issued a statement on its website that effective midnight Moscow time on 20 July, any shipping identified as heading towards a Ukrainian port would be regarded as “potential carriers of military cargo” and considered “on the side of the Kyiv regime.”

Ukraine’s Ministry of Defence also declared that effective midnight local time on

21 July, all vessels in the Black Sea heading to Russia and Russian-occupied Ukrainian ports would be treated as potentially carrying military cargo, with all the associated risks.

The Ukrainian Grain Association said on 24 July that the country could increase exports by 1-1.5M tonnes/month to third countries via ports in the Baltic states (Klaipeda and others), Germany (Rostock, Hamburg), the Netherlands (Rotterdam), Croatia (Rijeka), Italy (Trieste) and Slovenia (Koper). It called on the European Commission to introduce subsidies of around €30-40/tonne for carriers and ports to meet the increased costs of these alternative routes.

Ukraine still faces grain import restrictions imposed by five EU member states – Bulgaria, Hungary, Poland, Romania and Slovakia – to protect farmers from falling prices due to increased Ukrainian imports (see story below).

Meanwhile, Turkey’s president Recep Tayyip Erdoğan has urged Russian President Vladimir Putin to reopen talks on the BSGI. Moscow is demanding that obstacles to its exports – such as restrictions on payments, logistics and insurance – be removed before it will re-join the BSGI.