A steady stream of ships are hauling grain and metals from Ukraine a month after the first inbound vessel sailed through its new shipping corridor in the Black Sea in defiance of Russian threats.
Matt Ammermann, Commodity Risk Manager, Vice President of Eastern Europe/Black Sea Region with StoneX Financial, gave an update during a webinar hosted by Northern Crops Institute on Wednesday.
“This is a good thing. Obviously, they’re not being hit by anything,” Ammerman said.
He pointed out that one ship did get hit recently, but it didn’t affect the markets. He credits that to the Ukraine’s ability to keep going.
“It’s amazing, the resilience of Ukraine, how quickly they go back to operating,” he said. “Right now, most of these vessels are a mix of products, but there are rumors of anywhere from 10 to 30 cargoes that China bought of Ukraine corn. So, I guess we just wait to see how much exactly that is, but this is good for Ukraine. If you look at farmers, what they get paid freight rates from Odessa versus the Danube ports are much cheaper to the tune of roughly forty dollars. So, as a farmer, you’re going to take the risk of selling to the Ukraine ports to get you a better price versus Danube.”
Ammermann says while farmers in Ukraine are in the process of planting winter wheat, there are unanswered questions about potential corn and sunflower acreage next spring.
“The idea is that the farmer in Ukraine is struggling financially. If you’re a farmer, you understand you can’t do three back-to-back years of bad years. Well, Ukraine is kind of on that third year at this point,” he said. “But ironically, somehow, they just get it done and they always lean optimistic. So, I think they still plant near the same as what they planted this past year on corn crop rotations. Yes, you can maybe see a little bit more go to sunflower. Sunflower seed is something very highly regarded in Ukraine.”
Earlier this month, the Ukrainian government said Russia has destroyed almost 300,000 metric tons of grain since July in attacks on Ukraine’s port facilities and on ships, underscoring the war’s threat to global food security.
