Russian forces have attacked several Ukrainian port infrastructures in the south and threatened ships that would reach those shores. For the first time, Moscow also encountered a port on the Danube, a market almost exclusively for grain.
Moscow has targeted Ukrainian grain exports after exiting the Black Sea Safe Corridor Agreement. For more than four hours on Monday, July 24, drones bombed a Ukrainian port on the Danube. A first since the beginning of the war, when the great river established itself as one of the main routes for Ukrainian grain transport. This attack confirms the Kremlin’s desire to cause significant damage to Ukrainian trading markets.
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In the port of Reni, three grain warehouses were destroyed by Shahed-136 drones, said Ihor Plekhov, head of the local administration. Maersk buildings were also affected. The destination is a few hundred meters from the border with Romania, a member country of the European Union and NATO. “That’s probably why they didn’t use missiles, which are less accurate,” said Andrey Sizov, an analyst at think tank SoveCon, which specializes in Black Sea agricultural markets. The latter does not hide his “surprise” after this operation.
A drone attack on the Ukrainian port of Reni on the Danube on July 24, 2023. The video comes from neighboring Romania. (TELEGRAM)
In Ismail, another Ukrainian river port further east, a grain shed was also destroyed and seven people injured. Romanian President Klaus Iohannis condemned these attacks “strongly”: “This latest escalation affects the transit of Ukrainian grain and thus global food security.”
The Danube, an important route for Ukrainian grain
Previously neglected by Ukraine, the Danube has become the main export route for Ukrainian grain via a few modestly sized river ports – Reni, Izmail, Kiliya and Ust-Dunaisk – whose terminals have developed rapidly over the course of the war. Too small to accommodate all production, they still allowed Ukraine to “ship about 2.5 million tons per month,” according to the analyst, or “40 to 50% of total exports.” Arriving in Romania, the cargo reaches the port of Constanta, which has already handled a third of Ukrainian exports since the beginning of the war. You can also reach Western Europe by train or truck.
Since the end of the Black Sea Agreement, “Reni and Izmaïl are an important pipeline for the export of Ukrainian goods,” summarizes Cezar Gheorghe, agricultural markets specialist at Romanian company Agricolumn. After the attack, about fifty ships anchored near the two small ports, he said. Insurance companies have already doubled their rates, he adds, and “some are waiting to see if they’ll even go ahead with it.”
Last week, some shipowners “refused to send ships onto the Danube,” adds Andrey Sizov. Due to this new threat, deliveries to terminals may be limited to daytime operations. In fact, drone strikes are often carried out at night to complicate the work of anti-aircraft defenses. But reducing the time window by several hours “would obviously slow down the pace of deliveries,” adds this expert.
Former ports protected by the agreement are now being targeted
Especially since the route to the Black Sea seems closed. The three ports affected by the grain agreement, Odessa, Chornomorsk and Youzhni-Pivdennyi, had enabled the sale of almost 33 million tons of grain. But they are once again under the blockade of Russian forces, which are systematically attacking their facilities. On July 18, immediately after the end of the agreement, according to the Ukrainian military command, Ukrainian “port infrastructure” in Odessa and industrial infrastructure in Mykolaiv, further east, were damaged.
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“These attacks were more or less to be expected after the official end of the agreement,” comments Andrey Sizvov. This time the Kremlin probably wants to show that it means business. Until now, markets had not believed it because they remember that Moscow cried “wolf” on many occasions.” Last October, Russia withdrew from the deal for just a few days before rejoining it after Turkish President Recep Teyyip Erdogan’s intervention.
Seizures happen almost every day now. On Wednesday, the port of Odessa was attacked again and 60,000 tons of grain were destroyed in Chornomorsk, although they “should have been shipped 60 days earlier through the grain corridor,” according to Ukraine’s Agriculture Minister Mykola Solsky. “The grain infrastructure of international and Ukrainian traders and transporters is most affected,” he said, referring to the facilities of the French CMA-CGM and the Canadian Viterra. It will take at least a year, he added, to “fully restore” the destroyed sites.
The port infrastructure of Chornomorsk (Ukraine) was damaged by Russian attacks on the night of July 18-19, 2023. (UKRAINIAN MINISTRY OF AGRICULTURE)
However, in the eyes of Cezar Gheorghe of the Romanian company Agricolumn, these estimates seem exaggerated. The terminals “do not hold such volumes for months” as their operations are transit-based. Ditto for repairs, which he says could take “three to four months.” Russian forces attacked the Odessa region again in the following days, and Andrey Sizov particularly emphasizes the political and “symbolic” dimension of such attacks.
Tensions in European branches
After the closure of the sea corridor, “investors are reacting to the intensification of the bombing of alternative grain export routes,” adds Arthur Portier, an analyst at Agritel, to AFP. In particular, the price of common wheat has increased by 12% in recent days compared to the French quotation Matif (EuroNext). Meanwhile, Ukrainian crops are under pressure. “The ports of Odessa are blocked and a threat looms over the Danube terminals, which still have limited export opportunities,” summarizes Andrey Sizov. A situation that is all the more difficult because “the tensions between Ukraine and the countries of Eastern Europe have not disappeared”.
A cargo of grain in the Romanian port of Constanta on June 21, 2022. The site has become one of Ukraine’s most important grain export centers. (VADIM GHIRDA / AP / SIPA)
Indeed, Romania, Poland, Slovakia, Bulgaria and Hungary have received from the European Commission a ban on the sale of Ukrainian grain on their territory until September 15 in order not to destabilize the local economy. They had also benefited from 156 million euros in European aid. “Ukraine wants to deliver as quickly as possible,” says Cezar Gheorghe, finding it difficult to compete on price, not to mention imbalances “in regulatory processes.” These five EU states even intend to extend the ban. An “unacceptable” proposal, the Ukrainian President condemned during a meeting on the issue on Monday evening.
With long queues of trucks, the Romanian port of Contanta is already completely overloaded. Regarding the end of the agreement, “the Ukrainians had planned to ship 27 million tons through Romania this season, but Romania also plans to export 20-22 million tons,” emphasizes Cezar Gheorghe. Overall, this is double the port’s operating capacity. In order to export its goods, the Grain Union of Ukraine proposes the creation of “green corridors” towards the ports of the Baltic countries (Klaipeda), Germany (Rostock, Hamburg), Croatia (Rijeka) and other countries, thanks to European subsidies that would offset transport costs.
Russia is leading a total blockade of the Black Sea
Finally, Ukraine is trying a last diplomatic option. “We have (…) identified the priority steps needed to unblock the Black Sea grain corridor,” Volodymyr Zelenskyy said after an interview with NATO Secretary General Jens Stoltenberg. At this point, the international community is content to remain politely silent about possible patrols. “Even if the Black Sea route is difficult to replace, we support President Volodymyr Zelenskyy and Ukraine (…) in finding alternative transport routes,” promised German Foreign Minister Annalena Baerbock.
The Russian Ministry of Defense released a video on Friday, July 21, 2023, which is said to show the ship “Ivanovets” during an exercise in the Black Sea. (RUSSIAN MINISTRY OF DEFENSE)
In fact, Russia continues to exert pressure in the Black Sea to dissuade Ukraine from resuming trade there. The ship “Ivanovets” carried out a live launch of cruise missiles as part of a training exercise on Friday. Moscow has announced that ships bound for Ukrainian grain ports are considered military targets by default and are therefore vulnerable to attack. Identifying the flag is difficult, notes Andrey Sizov, and targeting a Turkish ship, for example, could have unfortunate consequences. Without completely ruling out hypothetical targeted attacks, he recalls that “from the Kremlin’s point of view, it remains easier to attack the terminals.”