(Reuters) — A number of insurers are interested in providing cover for grain shipments from Ukraine after a deal was reached to reopen Black Sea ports, although the first shipments are expected to be weeks away, industry sources said on Friday.
Russia and Ukraine signed a landmark deal on Friday to reopen ports for grain exports, raising hopes that an international food crisis exacerbated by the Russian invasion could be eased. The agreement capped two months of talks brokered by the United Nations and Turkey, a NATO member that has good relations with both Russia and Ukraine and controls the strait that leads into the Black Sea.
Securing shipping and insurance will be a critical part of the process moving forward.
“There are a number of insurers who have expressed an interest in writing this risk and one or two brokers as well. It may well be a consortium forming,”; Neil Roberts, head of marine and aviation at Lloyd’s Market Association, told Reuters.
“A number of things remain to be resolved and insurers will have to assess journeys individually,” said Roberts, whose association represents the interests of all insurers on the Lloyd’s of London insurance market.
Ukraine’s ports have been closed since Russia’s February invasion, which Moscow calls a “special military operation,” and not enough is known about the state of the ports and risks such as floating mines and damaged ships in port areas.
“Ship owners will need some form of financial security. So at least the first voyages have to prove that the routes are safe,” said a shipping official.
The initial problem is that there are more than 80 ships stuck in Ukraine, many with cargoes on board including grain, which must come out before new ships can enter, sources said.
The LMA has placed Ukrainian waters in their high-risk zone and all sailings must be approved by the underwriters, who are awaiting more details on the details of how the agreement will work.
A blockade of Ukrainian ports by Russia’s Black Sea Fleet, trapping tens of millions of tons of grain in silos and stranding many ships, has exacerbated bottlenecks in the global supply chain, and along with sweeping Western sanctions, has fueled galloping inflation in food and energy prices around the world. world.