Danube shipping crunch puts Ukraine’s grain exports at risk

Up to 70 vessels are waiting near the Danube’s Sulina Canal for access to Ukrainian ports to load grain for export, traders and analysts said, as a shortage of pilots and the prioritization of other cargoes contribute to lengthy delays, Reuters reports.

Following Russian attacks that effectively blocked Ukraine’s Black Sea ports, which previously handled around 90% of the country’s grain exports, some shipments have been diverted to Danube river ports. However, those facilities have significantly lower capacity.

Grain shipments are also competing for access with higher-priority cargoes, including fuel, further slowing exports. Frequent air raid alerts, which require port operations to be suspended, have added to the disruption.

Ukraine is among the world’s largest grain exporters, and prolonged interruptions to its shipments could put upward pressure on global grain prices.

“As of August 25, more than 50 vessels were waiting to pass through the Sulina Channel, while only five to seven vessels per day were moving towards Ukraine's Danube ports,” consultancy ASAP Agri said.

The consultancy said on Telegram that each day of delay can cost up to $8,000, adding to already elevated freight rates.

“The situation could worsen if weather conditions deteriorate in the coming days,” it added.

Katerina Kononenko, operations manager at Avalon shipping, said the Sulina Canal was expected to close for around two days because of poor weather.

“For the current situation, this is really a serious setback. Today, about 70 vessels are waiting at Sulina road. At the moment, the real traffic capacity of the Sulina Channel for vessels going to Ukrainian ports is only two ⁠to three vessels per day. This is very low,” she added.

Ukraine also relied heavily on Danube ports earlier in the war, when Russia blocked access to ports in the Greater Odesa region. Grain export capacity through the Danube peaked at 2.5 million metric tons per month in 2022-2023.

Although current volumes remain well below those levels, traders have been gradually increasing shipments through the Danube. State railway operator Ukrzaliznytsia said this month that grain transportation volumes to Danube ports in August were 11 times higher than in July.

Despite the increase, Agriculture Ministry data showed that Ukraine exported 539,000 tons of grain between August 1 and August 21, compared with 1.73 million tons during the same period a year earlier.

By Vafa Guliyeva