After the Black Sea Grain Agreement, which allowed 33 million tons of grain to be shipped from Ukraine within one year, expired on Monday, several insurance companies have dropped coverage for risks in the region, AFP reported on Wednesday.

Grain composition Photo: Yefrem Lukatsky / AP / Profimedia

“We have stopped covering flights” to three ports in the corridor, Odesa, Chornomorsk and Yuzhny, Frédéric Denefle, managing director of the French group Garex, which specializes in military risk insurance, told AFP.

While “it is difficult to determine what competitors are doing (…) what is certain is that all markets believe there is an additional risk and now that the corridor is suspended, it will be much more difficult to defend,” he added.

In any case, he explained, “there are no more shipowners willing to go there.”

A source close to London-based broker Marsh told AFP its cover with insurer Ascot was “currently suspended”, confirming a Reuters report.

In response to questions from AFP, Marsh said she was “exploring possible options to continue this export (grain from Ukraine, no) that is important for global food security.”

Since the agreement signed in July 2022 under the auspices of the UN and Turkey and extended several times since then expired on Monday, Russia has dealt major blows in the Odesa region.

According to Kyiv, more than 60,000 tons of grain were destroyed overnight in Chornomorsk, where “full restoration of the damaged infrastructure will require at least a year.”

There are other types of transport, especially river and land, although the costs are higher.

These alternative routes, through which half of Ukraine’s agricultural exports now pass, will need to be strengthened to cope with the additional flows.

“Possible risk reduction option”

At the same time, according to Ambassador Vasyl Bodnar, Ukraine has created a fund to guarantee these risks.

“Also, we have opportunities to attract ships and companies that are ready to supply these ships for the transportation of grain. From our point of view, it can be implemented even without this agreed route, but through the territorial waters of Romania and Bulgaria. It is also possible to minimize risks,” the ambassador said.

Earlier, he said that Ukraine intends to continue the grain agreement in a tripartite format: “We are working. President Zelenskyy sent relevant appeals to the President of Turkey and the UN Secretary General. Minister Kuleba is already working at the UN to seek a consensus of the international community regarding the continuation of this grain initiative.”

It will be recalled that on Monday Moscow announced its withdrawal from the grain agreement, which last year allowed the safe export of Ukrainian grain from Black Sea ports to solve the global food crisis.

Russia said it pulled out of the deal because a parallel agreement to promote exports of its own grain and fertilizer in the face of Western economic sanctions was not respected.

The Kremlin also warned on Tuesday that there would be “risks” in trying to ship grain from Ukrainian Black Sea ports without security guarantees from Russia, as Moscow claims Kyiv has used those waters for military operations.

Read also:

  • Russia warns that it will consider ships bound for Ukraine as potential military targets
  • Immediate effect of the Kremlin’s decision to terminate the Black Sea Grain Agreement / What consequences may be caused by Vladimir Putin’s measures
  • Zelensky’s first reaction after Russia’s decision to withdraw from the grain agreement: We must do everything to keep this corridor in use / Companies will, if Turkey allows them
  • Odesa region, a key area for the important grain deal, was attacked immediately after the UN-brokered deal ended / Arrival at the port

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