Could Ukraine's Grain Corridor Ease the Global Food Crisis?

Could Ukraine’s Grain Corridor Ease the Global Food Crisis?

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What about sea mines?

Russia and Ukraine accuse each other of planting naval mines that float around the Black Sea, posing a significant threat. A crew member on the Sierra Leone-flagged Razoni, the first ship to pass through the corridor on August 1, cited them as a concern.

Mines lie far off Ukraine’s shores, and Bulgarian, Romanian and Turkish military diving teams have defused some that have ended up in their waters.

Cleaning up the rest could take months and there was not enough time to do so before the grain agreement took effect.

What about insurance?

The Istanbul-based Joint Coordination Centre, which oversees the deal and is made up of Russian, Turkish, Ukrainian and UN officials, published procedures on the shipping channel in August to address the concerns of insurers and ship owners.

Insurers had initially said they were willing to provide cover if international naval escorts and a clear strategy were in place to deal with sea mines.

Since then, they have created clauses to provide cover, including provisions requiring ships to invalidate their policies or stay inside the corridor while transiting at risk.

Following the 22 July agreement, insurer Lloyd’s of London’s Ascot and broker Marsh established a marine cargo and war insurance facility for grain and food products moving out of Ukrainian Black Sea ports with $50 million cover per voyage.

The cost of overall insurance for vessels sailing in Ukrainian ports – which includes separate clauses of cover – is likely to remain very high however.

This has been compounded by insurers covering more risk after reinsurers introduced exclusions for Belarus, Russia and Ukraine earlier this year, which means more risk for insurers and the potential for cargo to be covered. Decreased appetite

What about crew?

In September, Ukraine enacted a decree allowing its sailors to leave the country despite wartime restrictions, a move aimed at tackling Ukrainian grain exports and providing a workforce for the wider global shipping industry.

About 2,000 sailors from around the world were stranded in Ukrainian ports at the beginning of the conflict.

Industry estimates suggest that more than 300 crew members are stranded in Ukraine.

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