Since the February 24 invasion, Russia has allowed grain exports out of Ukraine facilitated by a July deal to mitigate the probability of a global food crisis. After an attack on its Black Sea fleet, Russia revoked its participation in the deal as it could not “guarantee safety of civilian ships”.

In 2021, Ukraine grain exports amounted to ~35.7 MMT, constituting ~40% of total bulk exports out of the country over an average sailing distance of ~2.900nm. Relative to the global seaborne grain trade in 2021, Ukrainian exports constituted ~6.5% of volumes and ~3% of tonne-mile demand, illustrating relatively short distances for exports.

After the invasion, grain exports fell to zero, but quickly recovered to ~1.5 MMT in September (~18.5 MMT annualized). The revocation of Russian participation in the Ukrainian grain export deal is ultimately bearish for dry bulk shipping volumes, but secondary effects of sourcing from further afar could counter the negatives as we have already seen volumes decline ~60% compared to the 2021 total as of September.

Wheat prices jumped 6% on the news, with the December wheat contract hitting USD8.93 a bushel.