The deal to allow the safe transport of grain out of the Ukraine by sea was an unprecedented agreement between enemy combatants. Yet, the potential risks of using the corridor during the ‘safe’ window of time were considered significant.
In this edition of the Lloyd's List Podcast from 29 July 2022 that is published here specially for ICIC members and visitors, we spoke to war risk expert and head of marine and aviation at the Lloyd’s Market Association Neil Roberts about the insurance hurdles that were yet to be overcome, and to Anna Biliuga, an agent for Eurogal Services, which acts as Lloyd’s agents inside Odesa, for a personal take on how the grain deal will play out on the dockside.
The opening of the corridor was a test in terms of the logistics and security challenges for getting ships out of a war zone, but also in terms of the political trust required on all sides.
Significantly, insurers were not yet able to see the details they needed to get ships moving and attempt to install some trust that it would be safe for bulkers to operate in Ukraine.
Approximately 25m tonnes of grain were ready to be shipped from Ukrainian ports against a tight timescale to free up the silos for the fresh harvest and ensure limited rotting.
The UN’s World Food Programme took the lead on the initial shipments destined for sub-Saharan African countries that have struggled importing food at such high prices. We also expected high volumes to head to China and South Korea — adding some tonne miles to the equation even before geopolitics were factored in.
We delved into the insurance situation that would realistically make or break this deal with Neil Roberts, head of marine and aviation at the Lloyd’s Market Association.
We also presented a unique view of the situation from inside Odesa, via Anna Biliuga, an agent for Eurogal Services, which acts as Lloyd’s agents inside Odesa. Anna has been regularly keeping the industry informed of vital developments from inside Ukraine since the outbreak of war. Lloyd’s List Editor Richard Meade caught up with her the week of 22 July 2022 and asked her to offer an insiders’ view of what’s happening behind the headlines.
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Market cycles can be forecast, but with limited reliability. The extremities of market peaks, however, are driven by ‘black swans’ – developments and events that happen only rarely, tend to catch society by surprise, and have a transformative impact around the globe.