The first ship with grain from Ukraine was unloaded in the Turkish port of Derince since the beginning of the war with Russia.
Ukraine unloads first corn shipment on foreign soil since the start of the war and a cease of trading activities in the Black sea.
Ukraine and Russia reached an agreement to resume exports by sea under the auspices of Turkey and the United Nations during the month of July. Authorities estimate that at least 3 to 5 ships a day will call at Ukrainian ports in the next two weeks. This scenario is expected to generate an increase in grain sales from ports in the Black Sea. Reaching around 3 million tons of grain per month, which is still lower than the almost 6 million tons which exported monthly before the war. Nonetheless it appears as a promising scenario, at least from the standpoint of resuming trading activity to a certain extent.
It still remains a logistical challenge to clear the port silos so that the 2022 harvest that is currently underway can be accommodated.
The first ship with grain from Ukraine was unloaded in the Turkish port of Derince. The vessel Polarnet departed last Friday with 12,000 tons of maize from the port of Chornomorsk.
That ship was initially destined for Lebanon, but will eventually go to Syria.
Two more ships departed from Ukraine’s Chornomorsk terminal in the Black Sea overnight. So far, 12 ships carrying grain have set sail from the Black Sea in the past nine days. One vessel is transporting 2.5 million bushels (64,720 metric tonnes) of corn to South Korea while the other is carrying 5,300MT of sunflower meal to Turkey.
Ukraine still has 20 million MT of grain and oilseed products to ship from its 2021/22 reserves and is expected to harvest 40 million MT of agricultural products from the 2022/23 harvest. Therefore, shipping rates will need to spike up in order for the country to avoid significant storage issues in the coming months. This will be especially important, as peak harvest activity starts to to ramp up across the Northern Hemisphere.
Price drops within the futures market
With Ukrainian exports taking off, prices on the futures market in Chicago and Paris fell late last week. But wheat and maize prices also fell, as a record harvest is expected in Russia. The average hectare yield is currently a quarter higher than a year ago. Russia expects between 87 and 90 million tons of wheat, while the US Department of Agriculture expects 81 million tons. The previous Russian record is 87.8 million tons of wheat in the 2017-18 season.
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