RUSSIA will have to further cut grain exports this month after halting loadings at its main ports on the Black and Azov seas, with another terminal announcing yesterday that it had suspended operations.
The move by KSK, Russia’s largest sea grain terminal, means all three terminals in the Black Sea port of Novorossiysk have now been halted. Two others there – NZT and NKHP – were put out of action on Wednesday after a massive Ukrainian drone attack on the port.
“The (suspension) decision was made to ensure the safety of staff and infrastructure,” KSK owner Delo Group said in a statement. Sources said NKHP’s loading gallery sustained severe damage, likely keeping the terminal offline for months, while NZT suffered less damage and could resume operations sooner. The sources said KSK has not been damaged. In recent weeks, both Russia and Ukraine have intensified attacks on each other’s commercial shipping and ports, driving global grain prices higher.
“The persistent hopes of a significant number of market participants that the situation in the Azov and Black seas would return to normal have been confronted with the inescapable reality of even greater escalation. The market is severely underestimating this situation,” Andrey Sizov, head of the Sovecon agency, told Reuters.
He said the terminal suspensions could reduce Russian exports by 0.7 to 1.2 million tonnes in August alone. Ukraine has transmitted an offer to Russia, via a third party, for both sides to halt attacks on civilian targets in the Black Sea, a source familiar with the matter told Reuters yesterday, adding that Kyiv has yet to receive a response.
Russia’s Black Sea ports have become even more critical for exports because of shipping restrictions in the Sea of Azov imposed on July 10 after drone attacks. As a result, Russia’s seaborne grain exports fell 20.3 per cent year on year in July, according to data from industry sources.
Even before the latest disruption, analysts were already predicting that Russian grain exports would hit a 10-year low in August. They estimate that around 1m tonnes of grain have been exported so far this month.
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