Grain freight from Constanta is cheaper than from Odesa due to military risks

Idle ships during air raids are adding an additional percentage to freight from Ukrainian ports.

Military risks continue to increase the costs of maritime logistics for Ukrainian grain. This was reported by Barva Invest operating partner Bohdan Kostetsky for AgroTimes.

According to him, freight from Constanta, Romania, to Alexandria, Egypt is currently up to $5/t cheaper than from Odesa. The reason is the inclusion of military risks and costs of idle ships during prolonged air raids due to Russian attacks in the rate.

This also affects the structure of the fleet. Over the year, the share of “panamaxes” with a carrying capacity of 60 thousand tons decreased to approximately 20% compared to 40–45% in previous years.

“In order to deliver barley to China, feed grain to the countries of Southeast Asia and the Far East, large vessels of the supramax and panamax class (45–65 thousand tons) are needed,” Kostetsky noted.

Turkey is creating additional pressure on rates. Since July 1, it has increased the tariff for the passage of foreign vessels through the Bosphorus and Dardanelles without calling at ports by 15%. According to the expert, this will add about $1/t to the cost of transportation.

However, there is no sharp increase in rates yet. It is restrained by a sufficient number of fleets ready to work in the Black and Mediterranean Seas, as well as a lower supply of grain from Ukrainian farmers.

The expert associates cautious optimism with the possible deoccupation of the Kinburn Spit. This would open up the prospect of resuming navigation from the port of Mykolaiv.

“If traffic opens from there, it will lead to a decrease in transshipment rates in ports and will allow us to expand the “throat” that currently exists. However, we are still observing only the first signs of positive dynamics. There is still a lot of work ahead,” added Kostetsky.

As USM wrote the day before, shipping safety in the port’s water area was discussed in Chornomorsk.