The 700-foot Liberian-flagged ship slowly sailed out of the Ukrainian port of Odessa, past rows of yellow cranes and into the calm waters of the Black Sea. Her hull was almost completely submerged, loaded with corn bound for Bangladesh. Out at sea, more freighters loaded with grain had already left the port, passing ships that were about to enter.
It was mid-March in Odessa, and what seemed unimaginable just last summer, when a Russian naval blockade paralyzed all commercial activity, was now a reality. The port had returned to its usual bustle, the result of a military campaign that drove Russian warships out of Ukrainian waters and secured a shipping route to foreign markets.
The operation has been so successful that Ukraine’s seaborne exports of grains and oilseeds – an economic lifeline for the war-torn nation – are now approaching pre-war levels, according to data shared with The New York Times.
In the past six months, Ukraine has exported 27.6 million metric tons of grains and oilseeds through the Black Sea, the country’s main export route, according to figures from the Ukrainian Sea Ports Authority. That’s just 0.2 million metric tons less than the average export volume in the same period from 2018 to 2021, before Russia’s full-scale invasion began in February 2022.
According to Ukrainian data, in the first quarter of this year Black Sea grain exports even exceeded pre-war levels.
Estimates of grain and oilseed exports by Dragon Capital, a kyiv-based investment firm, and figures on the number of grain ships arriving at Ukrainian ports compiled by Lloyd’s List Intelligence, a data company shipping, point to similar trends.
Sal Gilbertie, head of Teucrium Trading, a U.S.-based company that sells agricultural-linked securities on the New York Stock Exchange, said statements by Ukrainian officials that seaborne grain exports were near levels before the war were “accurate.”
Ukraine still faces a number of challenges that could prevent grain exports from stabilizing at pre-war levels, including continued Russian attacks on port facilities and a smaller harvest this year. The US Department of Agriculture expects Ukraine’s grain exports to decline in the near future.
But analysts say the overall environment has been improving, noting that shipping companies are eager to ship Ukrainian grain despite the war. “The data shows there is no shortage of shipowners who are willing to take the risk and get in there,” said Greg Miller, senior maritime reporter at Lloyd’s List.
Ensuring a high flow of grain exports is a strategic necessity for Ukraine. Grains and oilseeds accounted for a third of Ukraine’s exports last year, said Natalia Shpygotska, senior analyst at Dragon Capital. They have become instrumental in sustaining Ukraine’s war-torn economy and, ultimately, its war effort.
Tariel Khajishvili, director of Novik LLC, a Ukrainian shipping agent operating in Odessa, said that “it is obvious that without grain exports,” the country’s economy would fail.
After the Russian invasion, Ukraine was forced to suspend trade across the Black Sea for several months due to Russian military control of the sea, threatening global food security. In July 2022, an agreement brokered by the United Nations and Turkey allowed Ukraine to resume exports through an agreed corridor in the Black Sea.
But Russia withdrew from the deal a year later and threatened all commercial ships heading to and from Ukraine, causing seaborne grain exports to cease last August.
To try to revive exports, the Ukrainian military launched a campaign to expel the Russian navy from parts of the Black Sea, destroying many of its warships and attacking its headquarters in Crimea, the Russian-occupied Ukrainian peninsula. The successful operation allowed Ukraine to establish a new sea corridor skirting the Ukrainian coast before bringing ships into the territorial waters of NATO members.
Dmytro Barinov, deputy director of the Ukrainian Sea Ports Authority, recalled that when the first grain ship sailed through that corridor in mid-September, “we were very nervous; We prayed that everything would go well.”
Eventually, the ship made it out safely and soon the “familiar and pleasant sound” of fog horns could be heard again in Odessa, he said.
The number of grain ship arrivals at the Odessa region’s three ports – Odessa itself, Pivdennyi and Chornomorsk – rose to 231 in March from five in September, according to data compiled by Lloyd’s List.
The increase has been helped by deals Ukraine has negotiated with global insurers to provide coverage for ships. Teucrium Trading’s Gilbertie said Moscow also had an interest in preventing the fighting from spreading to the Black Sea, as it also uses it to export goods.
Today, Ukraine can only use the ports in the Odessa region to ship its grain by sea, as its other seaports are either too close to Russian lines to operate or are occupied by Russian forces. Still, with an average of 4.1 million metric tons of grains and oilseeds shipped each month, the three ports are now close to overall pre-war sea export volumes.
The reopening of Odessa ports is a welcome financial boost for Ukraine. Having lost key economic assets in the war (such as its metal factories in the east, which were captured or destroyed by Russia), Ukraine now relies more on grain exports to sustain its economy. Dragon Capital estimated in the fall that the return to full operation of Odessa ports could add several percentage points to Ukraine’s gross domestic product growth this year, which it forecast at 4 percent.
But analysts warn that the initial success of Ukraine’s new sea route may not last.
Russia continues to attack port infrastructure in Odessa, and now that Ukraine faces a shortage of air defense weapons, more missiles are managing to arrive. In mid-April, Russia managed attacked two food export terminals in Pivdennyidestroying several containers.
Dragon Capital’s Ms. Shpygotska also noted that Ukraine’s recent high grain export volumes partly reflect shipments delayed by the Russian naval blockade, meaning such volumes may not be reached again in the future. especially as grain production is forecast to decline.
“Producers and exporters are now well positioned to export as many crops as are available,” he said. “But it all depends on the harvest.”