Black Sea Grain Deal Deadline Looms: Ukraine Shipments Slowing Down

Russia, one of the important parties involved, has stated that it will continue to talk, despite Moscow's threat to leave on May 18, adding to the uncertainty for traders and shipping companies attempting to prepare ahead.

Ukraine has been permitted to export 29.5 million tonnes of agricultural products under the agreement, including 14.9 million tonnes of maize and 8.1 million tonnes of wheat. However, the number of ships arriving to take up goods has reduced this week to two per day, down from three to four per day on average in the previous three weeks, according to data from the agreement's joint coordination centre. NORDEN, a Danish shipping company that transports grains, is one of the companies that will not deploy ships into the zone.

"At the present, we are not involved in that trade. It's a risky area; it's difficult to predict what will happen," NORDEN CEO Jan Rindbo told Reuters. "Things can change quickly... from the moment you agree to go in and pick up a cargo until the ship arrives." Currently, each shipment takes at least nine days and requires sailing into one of three Ukrainian ports involved in the accord and undergoing necessary inspections.

According to data from the maritime and commodities data platform Shipfix, the number of cargo orders - global requests for available ships to transport grains from Ukraine - decreased to 355 in April from 489 in March. According to Shipfix statistics, there are currently 107 forward grain orders for ships in the market, with 94 for May and only a few orders for the months ahead.

There are 40 to 60 commercial ships currently detained in all of Ukraine's ports, unable to leave due to stringent limits on what vessels are allowed to exit the corridor, raising concerns about more assets being held up if a resolution is not struck. Ship insurance has been critical, as war-cover plans must be renewed every seven days, costing thousands of dollars.

According to market estimates, rates have remained steady for weeks at roughly 1% of a ship's value. According to insurance sector insiders, there is no change in cover arrangements for the time being, though situations could change swiftly.

"We would expect a significant re-addressing of what is currently charged and the way it's underwritten if the grain corridor agreement is not extended and there is an escalation of the conflict," one industry source said. "Uncertainty is not good for anyone."