Black Sea Grain Initiative: Delayed vessel inspections cost Kernel US$5 million per month
Delays by Russians in the inspection of vessels as part of the grain initiative cost Kernel Holding, the largest agricultural holding in Ukraine, US$57 million.
Source: Bloomberg
Details: Due to the Russian slowdown in the inspection of ships under the grain deal, companies are forced to look for alternative river and land routes, which are more expensive.
According to Yevhen Osypov, the director of Kernel Holding, this costs the company approximately USD 5 million monthly. In total, this amount is USD 57 million.
Such costs highlight the challenges traders face when exporting through the "grain deal", which suffers from delays during inspections and long queues.
"Who suffers most? Ukrainian farmers who work in extremely difficult conditions," Osypov said by email.
Kernel is one of the largest Ukrainian exporters of grain crops. Since the signing of the export agreement about a year ago, it has shipped almost 3.3 million tonnes of grain from Black Sea ports, which is about 10% of the country's total exports under the grain deal.
"The company shipped 80% of its sunflower oil from Black Sea ports in the Odesa region from September through March, but since April the share has slid to 44%, raising costs," the message reads.
Background:
- From 26 to 30 June, no new vessels were allowed to join the grain deal, despite 29 applications being submitted to the Joint Coordination Centre.
- Kernel Holding, Ukraine's largest agricultural holding, submitted an application to the Polish Financial Supervision Authority for permission to delist the company's shares from circulation on the Warsaw Stock Exchange.
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