Resumed grain shipments from Ukraine are being put to the test following a recent deal that was brokered by Turkey and the United Nations. The Sierra Leone-flagged ship Razoni - carrying 26,000 tons of corn - departed Odesa at 9:48 am local time on Monday, becoming the first vessel to leave the port since late February. A Russian naval blockade still threatens Ukraine's commercial sea routes, while missile strikes have targeted several ports, as well as infrastructure for grain storage.
Quote: "We are ready to export Ukrainian grain," Ukrainian President Volodymyr Zelenskyy said after his visit to the Black Sea. "It is important for us to remain the guarantor of global food security."
It's a big development for Ukraine, which has been traditionally referred to as the "Breadbasket of Europe," as well as many developing nations that rely on its grain across Africa, the Middle East and Southeast Asia. It also raises hopes that an international food emergency could be avoided, with prices spiraling in recent months and exacerbating an inflation crisis. Besides freeing up grain that is currently trapped in Ukraine, there is another looming challenge of how to store or export the country's upcoming summer harvest, which is expected to yield an estimated 65M tons.
What's next? 16 more grain ships are awaiting departure from Odesa, though much will depend on whether the deal can hold, or if shipping firms and insurers will risk sending vessels into the mined waters. In anticipation of the deal, prices for wheat futures on the Chicago Board of Trade slid about 13% over the past month, though commodities still remain at elevated levels. A bushel of wheat is now trading around $8, which is more than double the price it was five years ago and about as expensive as late 2010 when high food costs helped spark the Arab Spring.