Ukraine crisis seen slowing Black Sea grain exports

The crisis over the disputed presidential election in Ukraine may seriously complicate grain exports by Russia as well as Kazakhstan, another key supplier, traders and analysts said on Friday. They said the signing of new contracts has all but come to a halt as tens of thousands of protesters take to the street in support of the opposition that accuses outgoing President Leonid Kuchma and his prime minister of stealing a November 21 presidential poll.
Andrei Sizov of SovEcon agricultural analysts said both Russian and Kazakh exporters were refraining from signing new shipment contracts to Ukrainian ports as they were not sure that railways and ports would receive payments for the transit and loading of the cargoes.
"No one is sure that the paid money is not lost," Sizov said.
He said that if the crisis in Ukraine continued, both Russian and Kazakh exporters would have to think about alternative export routes such as Baltic Sea ports.
A substantial portion of Russian and Kazakh grain exports are shipped via Ukraine.
"We still continue exports through Ukrainian ports, as we have paid for them in advance. But signing of new contracts has practically stopped, as we don't know what will happen to the hryvnia (Ukrainian currency)," said Kirill Podolsky, director of major Russian grain trader Yugtranzitservis.
Stormy weather at Russian Black Sea ports typical of the season has slowed down the country's grain exports slightly, but traders and analysts fear a more substantial slowdown due to the crisis.
Interfax news agency reported on Thursday that trains with various cargoes, including grain, were waiting at the country's Black Sea ports of Novorossiisk and Tuapse as there were no ships or storage to take their loads.
Sizov said: "Currently, the weather impact on grain shipments is not very strong, as exports volumes are not so big as in the years when the country had huge harvests, like in 2002, when even a small disruption sent problems stockpiling," said Andrei Sizov of SovEcon agricultural analysts.
Podolsky said there had been some delays in loading ships due to bad weather in the south, but these were quite normal for this period of time.
An official with the Association of Commercial Sea ports of Russia, uniting the main country's ports, denied there were any delays in grain shipments at Russian Black Sea ports.
"For example, on December 2, grain was reloaded directly to ships from 136 railway cars, while the average daily standard is 44 cars," the official told Reuters.