"Old and Little": Russia creates a shadow fleet for grain export - Reuters

On August 8, the British Information Agency Reuters reports. According to media information, the shortage of ships in Russia and a decrease in the activity of Western grain traders in the country create difficulties for transporting Russian wheat and increasing costs. While Russia plans to export the grain close to record volumes, its own fleet of grain vessels is not able to meet this demand.

According to the agency's sources, there are doubts about Russia's ability to maintain high grain export rates, and this can lead to an increase in world wheat prices. Russia's problems with the grain agreement, from which it eventually came out, is related to the difficulties that Russian grain exporters encountered while working with Western counterparties. This includes shipowners, insurers and banks who often refused to cooperate with Russia.

Reuters sources report that at least three large shipowners have stopped interacting with Russia since February 2022. Insurers also point out that Russian ports and terminals often do not have to do the communication with the sub -persons. Even refueling vessels in Russia can violate Western sanctions. Last year, Russia exported a record amount of wheat on ships leased from international shipowners and traders.

However, the situation has changed this summer, when the great traders of Louis Dreyfus, Viterra and Cargill have stopped working with Russia. In this regard, Russia began to rent a ship from small shipowners not related to these traders. Applications for such vessels increased by 40% in July. This process leads to an increase in the cost of insurance premiums for the transportation of Russian grain. According to sources, additional insurance premiums make tens of thousands of dollars a day.

More than 70% of Russian grain exports pass through the Black Sea ports. The shipowners, who still work with Russian ports, have also significantly raised prices for their services. One of the sources of Reuters claims that prices for the transportation of Russian cargoes for $ 10,000 a day are higher than on cargo from ports of Bulgaria and Romania. This entails a rise in the prices of Russian grain in the world market, which is confirmed by the head of the Russian Union of Grain Exporters.

British journalists emphasized that the Ministry of Agriculture of the Russian Federation predicts the reduction of grain exports by 8% this year compared to the past. However, the exact reasons for this decrease were not indicated. In December 2022, the Russian Ministry announced a plan to build a fleet of 61 new grain vessels, but there is still no information about the construction order, and the process of building one vessel usually takes about three years.

Currently, there are only 31 grain trucks in Russia, and most of them are old and small. We will remind, on August 3, US Secretary of State Anthony Blinken stated that Russia is blackmailing the world with famine. The supply of wheat from Ukraine was equivalent to 18 billion loaves of bread in 2022. We will also remind that in July Russia ceased to participate in the Black Sea Grain initiative.