The ongoing naval war fought between Russia and Ukraine in both the Black Sea and the Sea of Azov is having a notable impact on the movement of agribulk.
In one of the most recent incidents, a bulk carrier transporting corn out of Odessa was hit by three Russian cruise missiles, which left ten crewmen dead. The Golden Leo was being operated by sailors from both India and Syria. However, Odessa is not the only port to be impacted. In recent months, Russian missiles and drones have reached terminals in the ports of Chornomorsk and Pivdennyi, in the Black Sea, and Izmail, located on the Danube River.
According to data released by news agency Reuters, Ukraine has has to reduce capacity at its Black Sea ports by about a third because of recently escalating hostile actions. Previously, Ukraine was responsible for about 6% of global wheat exports and around 11% of maize exports.
In retaliation, Ukraine has used long range drones to effectively shut down Russian traffic in the Black Sea and Sea of Azov, where numerous bulk carriers have been among the 183 reported vessels struck. As a result, Russia has had to seriously limit transit through the Don-Azov canal, which is used for about a quarter of that country’s grain exports.
The impact on global trade of the effective shutting down of these two maritime export corridors cannot be overstated. Russia remains the world’s largest exporter of wheat and Ukraine services key markets in Africa, the Middle East and Asia. Recent disruptions have pushed prices for wheat to their highest levels in two years. Maize and rapeseed prices have also risen. Nevertheless, the situation remains better than that following the 2022 Russian invasion of Ukraine, when the latter’s exports were all but stopped.