Business requests the United Nations to facilitate the implementation of measures ensuring maritime safety in the Black Sea

31/ 07/ 2023

Thanks to the grain corridor, Ukrainian farmers exported their products to the global market, which, in turn, allowed them to contribute to global food security while maintaining financial stability for Ukrainian agriculture. However, according to business estimates, the logistics costs were quite high, and farmers incurred losses of around $2.5 billion (with the export of 50 million tons). However, as we can see from official reports, russia has blocked the grain corridor. This will undoubtedly lead to unpredictable consequences for the agricultural sector soon and could potentially result in a collapse of Ukraines agricultural sector. In particular, businesses forecast that the closure of the corridor may lead to a 33% reduction in winter crop sowing in 2023, equivalent to 1.5 million hectares. This means that wheat and barley production could decrease by 6 million tons. Such a decline could trigger price volatility in the global market and exacerbate food security issues. In addition, entrepreneurs point out that at the current cost of logistics through the Danube, farmers will be forced to sell grain at $40 per ton below the production cost. This will prevent agrarians from completing next years sowing and could result in an overall 30% reduction in grain production in Ukraine, equivalent to 15 million tons. At the same time, the safety and freedom of navigation for commercial vessels in the Black Sea could be a catalyst for Ukraines economic recovery and contribute to maintaining a stable global food security situation. Therefore, the European Business Association emphasizes the importance of joining efforts to implement a strategy for the full unblocking of Ukrainian Black Sea ports for commercial transportation of all types of goods. To achieve this, first and foremost, it is necessary to ensure the safety of navigation, including demining maritime territories. Secondly, it is crucial to create insurance programs for military risks for shipping companies engaged in direct trade with Ukraine. The Cabinet of Ministers of Ukraine has already approved a procedure that provides for compensation for damage caused to vessels during their stay in Ukrainian territorial waters. Thus, it is essential to focus not only on the full functioning of the grain initiative but also to achieve the establishment of unified conditions for transporting all types of cargo in the Azov-Black Sea basin for Ukraine. And, of course, the best solution would be the complete unblocking of maritime commercial transportation in the Black Sea and the opening of Ukrainian ports for all types of cargo. Export sectors need to continue operating at full capacity and unblock logistic chains. Therefore, the EBA is urging the United Nations Under-Secretary-General for Political and Peacebuilding Affairs, Mr. Stephane Dujarric, to take all necessary measures to assist in the implementation of the strategy for the full unblocking of Ukrainian Black Sea ports for commercial transportation of all types of goods and to ensure the safety and freedom of navigation for commercial vessels in the Black Sea. It is crucial for the international community to send a clear signal that no one will tolerate the violation of international law and threats to the sovereignty of any individual state! Therefore, we hope for the steadfast support of the international community in this context!

However, as we can see from official reports, russia has blocked the grain corridor. This will undoubtedly lead to unpredictable consequences for the agricultural sector soon and could potentially result in a collapse of Ukraine’s agricultural sector. In particular, businesses forecast that the closure of the corridor may lead to a 33% reduction in winter crop sowing in 2023, equivalent to 1.5 million hectares. This means that wheat and barley production could decrease by 6 million tons. Such a decline could trigger price volatility in the global market and exacerbate food security issues.

In addition, entrepreneurs point out that at the current cost of logistics through the Danube, farmers will be forced to sell grain at $40 per ton below the production cost. This will prevent agrarians from completing next year’s sowing and could result in an overall 30% reduction in grain production in Ukraine, equivalent to 15 million tons.

At the same time, the safety and freedom of navigation for commercial vessels in the Black Sea could be a catalyst for Ukraine’s economic recovery and contribute to maintaining a stable global food security situation.

Therefore, the European Business Association emphasizes the importance of joining efforts to implement a strategy for the full unblocking of Ukrainian Black Sea ports for commercial transportation of all types of goods. To achieve this, first and foremost, it is necessary to ensure the safety of navigation, including demining maritime territories. Secondly, it is crucial to create insurance programs for military risks for shipping companies engaged in direct trade with Ukraine. The Cabinet of Ministers of Ukraine has already approved a procedure that provides for compensation for damage caused to vessels during their stay in Ukrainian territorial waters.

Thus, it is essential to focus not only on the full functioning of the grain initiative but also to achieve the establishment of unified conditions for transporting all types of cargo in the Azov-Black Sea basin for Ukraine.

And, of course, the best solution would be the complete unblocking of maritime commercial transportation in the Black Sea and the opening of Ukrainian ports for all types of cargo. Export sectors need to continue operating at full capacity and unblock logistic chains.

Therefore, the EBA is urging the United Nations Under-Secretary-General for Political and Peacebuilding Affairs, Mr. Stephane Dujarric, to take all necessary measures to assist in the implementation of the strategy for the full unblocking of Ukrainian Black Sea ports for commercial transportation of all types of goods and to ensure the safety and freedom of navigation for commercial vessels in the Black Sea.

It is crucial for the international community to send a clear signal that no one will tolerate the violation of international law and threats to the sovereignty of any individual state! Therefore, we hope for the steadfast support of the international community in this context!