The reality is that Russia doesnt have much of a navy left after Ukrainian attacks - and Ukrainian missiles render any further threat unlikely. Plus Putin cannot risk alienating Turkey, which is making money and enhancing its reputation from the grain deal. JL
Chris Pleasance reports in Mailonline:
Twelve ships loaded with grain have left Ukraine's ports despite Russia withdrawing from a pact granting them safe passage through the Black Sea. Turkish President Erdogan vowed that his country will continue to provide security to the ships. Turkey and the United Nations said teams had inspected the vessels and were watching over them. 9.5 million tons of corn, wheat, sunflower products, barley, rapeseed and soy have been exported from the Black Sea since July.Twelve ships loaded with grain have left Ukraine's ports this morning despite Russia withdrawing from a pact granting them safe passage through the Black Sea.
Tracking data showed the vessels departing ports around Odesa, in southern Ukraine, and heading out across a stretch of heavily-mined sea towards the Bosphorus Strait and onwards to the Mediterranean Sea.
Turkey and the United Nations said teams had inspected the vessels and were watching over them after Russia withdrew from a pact allowing grain shipments out of Ukraine and said it could 'no longer guarantee' their safety.It came after a fleet of drones attacked Russia's Black Sea fleet on Saturday in an attack which it said targeted warships involved in protecting the grain convoys. The Kremlin blamed Ukraine for the strikes.
'Civilian cargo ships can never be a military target or held hostage. The food must flow,' tweeted Amir M. Abdulla, UN coordinator for the Black Sea Grain Initiative.
Turkish President Recep Tayyip Erdogan vowed on Monday that his country will continue to provide security to the ships - which contain vital food for developing countries, many in the Middle East.
The last time there were widespread food shortages in the region, it helped to spark the Arab Spring which caused widespread unrest and millions of refugees to flee to Turkey.
'Even if Russia behaves hesitantly because it didn't receive the same benefits, we will continue decisively our efforts to serve humanity,' Erdogan said in a speech.
The UN and Turkey say they plan to inspect a total of 40 vessels scheduled to depart on Monday.
Hundreds of thousands of tons of wheat booked for delivery to Africa and the Middle East are at risk following Russia's withdrawal, while Ukrainian corn exports to Europe will get knocked lower, two Singapore-based traders said.
'If I have to replace a vessel which was due to come from Ukraine, what are the options? Not much really,' said one Singapore-based grain trader who supplies wheat to buyers in Asia and the Middle East.
Chicago wheat futures on Monday jumped more than 5 per cent and corn rose over 2 per cent from the fears over supplies.
Earlier this year global wheat prices jumped to an all-time high and corn hit a ten-year top as Russia's invasion fuelled a rally set off by adverse weather and Covid supply disruptions.
Australia, a key wheat supplier to Asia, is unlikely to be able to fill any supply gap, with shipping slots booked right up to February, traders said.
Shares in Australia's GrainCorp - which posted a five-fold jump in H1 profit due to supply constraints arising from the Russia-Ukraine conflict - rose more than 7 per cent.
No ships moved through the established maritime humanitarian corridor on Sunday.
But the United Nations, Turkey and Ukraine pressed ahead and agreed on a transit plan for Monday for 16 vessels to move forward, despite the withdrawal of Russia.
'We have to see how the situation unfolds. It is not clear if Ukraine will continue to ship grains and what happens to Russian exports,' said the Singapore-based grains trader.
Asian buyers booking Ukrainian wheat cargoes include Indonesia, the world's second-largest importer of the grain, although the region typically relies on Australia and North America.
In recent deals, Indonesian millers bought four cargoes or around 200,000 tons of Ukrainian wheat for November shipment, in deals signed over the last few weeks, traders said. Some Vietnamese feed mills that bought Ukrainian wheat are also likely to suffer.
Last week, a government agency in Pakistan bought about 385,000 tons of wheat in a tender likely to be sourced from Russia and Ukraine.
'We are not sure if Russia will continue to export wheat or it will be safe for vessels carrying Russian wheat to ship from the Black Sea even as Ukrainian exports remain blocked,' said a second Singapore-based trader at an international company.
Ukraine's corn exports to Europe booked for November are likely to be hit as well.
'As far as Europe is concerned, corn is a bigger issue than wheat as we are getting into peak season for Ukrainian corn in November,' said the second trader.
Russia's decision is expected to support world vegetable oil prices as it threatens Ukraine's sunflower oil exports to key destinations, including top edible oil importer India.
Malaysian palm oil futures jumped more than 4 per cent on Monday.
Under the UN-brokered grains deal, a Joint Coordination Centre (JCC) made up of UN, Turkish, Russian and Ukrainian officials agrees on the movement of ships and inspects the vessels.
More than 9.5million tons of corn, wheat, sunflower products, barley, rapeseed and soy have been exported from the Black Sea since July.
Although global agricultural commodity prices have come off record highs in recent months, local retail food prices remain high and now face further upside.
'Typically, it takes about two months for higher grain prices to filter through the supply chain and impact consumers at the retail level,' said a Sydney-based analyst.
'But food processors do not have much forward coverage, so it is likely to be a lot quicker.'
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