The country has made the move to help ensure that it can export more grain from its ports.
As a component of a broader strategy to ensure it can export more of its grain, the Ukrainian parliament has approved a $500 million ship insurance fund to provide coverage for vessels experiencing any damage while at the country’s ports.
The country is seeking to renegotiate the Black Sea Grain Initiative terms while Russia’s invasion continues.
Ukraine is preparing for the renegotiation of the Black Sea Grain Initiative and have approved a new ship insurance fund as a part of that strategy. That deal with Russia, which invaded a year ago, was first created in July 2022, permitting Kyiv to export Ukrainian grain from three of its ports in the Black Sea. That deal is set to expire on March 18, to be renewed in three months.
Officials in Ukraine have stated that they intend to negotiate a new deal to extend the grain agreement by another year, instead of having to renegotiate it every three months. Government officials are also hoping to be able to start using other ports, such as Mykolaiv, as a part of a new shipping agreement and are aiming to add commodities, such as steel, as well.
The $500 million ship insurance fund will help reduce financial risk associated with calling at Ukrainian ports.
“We’re working on resuming delivery & expanding the range of products,” said Oleksandr Kubrakov, Ukraine’s deputy prime minister in a tweet on Friday. “I invite countries of the civilized world & interested businesses to cooperate.”
Ukraine will compensate possible damages to civilian vessels entering its ports.@verkhovna_rada decided the insurance fund amounts $500M. We’re working on resuming delivery &expanding the range of products. I invite countries of the civilized🌎& interested businesses to cooperate pic.twitter.com/Usmn8nSC7S
— Oleksandr Kubrakov (@OlKubrakov) February 24, 2023
With the ship insurance fund established, Ukraine is also aiming to boost the number of inspection teams in Turkish straits to help reduce the length of the growing line of vessels which is holding back export volumes. Inspection delays to and from Ukraine have become only increased tensions between Ukraine and Russia. Ukraine hopes to boost minimum grain-carrying ship size from 15,000 dwt to 25,000 dwt to cut down inspection delays.
Since Russia first invaded Ukraine, the latter country’s dry bulk exports have plummeted 77.8 percent, according to BIMCO data. Before the war, over one-tenth of the wheat and maize shipments in the world originated in Ukraine.