First grain offers start to appear for loading from Ukraine's Black Sea ports

21 Sep 2023 | Masha Belikova

It has already been a week since the Ukrainian government confirmed the first two vessels had arrived at Ukrainian Black Sea ports to load grains outside of the grain deal, and although the trade overall remained skeptical, the first offers have now started to appear from those ports.

Trade sources said some companies had started to originate in Ukraine's Black Sea ports, and in general, the market started to show intentions to load from those ports, with the first albeit nominal ideas appearing in the market at $183-190/mt FOB Pivdennyi, Odesa or Chornomorsk (POC) for corn and $186/mt FOB for 10.5% wheat.

The levels indicated are significantly higher than those shown on an FOB Danube basis, where feed wheat selling ideas have fallen to $166-169/mt and corn is offered at $177-195/mt.

But at the same time, this is also much lower than the closest origins in the region, as feed wheat loaded from Constanta was seen offered at $235/mt FOB along with corn offers at around $226/mt FOB and $240/mt CFR Spain Thursday.

Still, trade sources said that for now most trade is on a delivered basis, and even though some sellers are ready to offer loading from Ukrainian ports, buyers are afraid to risk such cargoes amid concerns of possible force majeure.

Moreover, to complete sales on a delivered basis more adequate freight rate ideas are needed, or FOB levels have to drop further, as currently, market participants said that there is a limited number of vessels ready to go to the Ukrainian Black Sea and thus the costs are extremely high.

For example, the freight for a handy vessel from Ukraine's POC ports into Spain was said to be at least $60/mt, compared with the same route from Constanta being indicated at around $21-22/mt.

Last Saturday, the Ukrainian government confirmed two vessels, Resilient Africa and Aroyat, had arrived at the port of Chornomorsk, while the Resilient Africa is meanwhile already safely headed to the Bosporus Strait.

There is talk in the market that more vessels have been fixed and are expected to arrive soon, but no more details were available.