Insurers continue to cover grain shipments from Ukraine through a U.N.-backed corridor although more clarity will be required soon, a senior Lloyd’s of London official said on Thursday, after the export accord was renewed for at least 60 days.
The deal allowing the safe wartime export of Ukrainian grain from its Black Sea ports, initially brokered last July by Turkey and the U.N., was renewed on Saturday for just half the intended period. Insurance for ships going into the three Ukrainian ports covered by the agreement has been vital, and the war-cover policies need to renewed every seven days.
“There is clearly underlying risk that if events change and somebody wanted to sink a ship to make a point, that clearly our appetite for continuing with those kind of risks might change,” Lloyd’s market’s Chairman Bruce Carnegie-Brown told Reuters. The shorter renewal term has raised concerns over forward shipments beyond the 60-day period.
The United States has pushed back on Russian demands that Western sanctions be eased before Russia allows Ukrainian Black Sea grain exports beyond mid-May, saying there were no restrictions on Russian agricultural products or fertilizer. Carnegie-Brown said that at the moment, “Ships and cargoes come together at pretty short notice”.
“I would have thought that anything less than 30 days notice of the extension becomes a bit problematic,” he said after Lloyd’s 2022 results were published on Thursday. There are up to 60 commercial ships still stuck in Ukraine, a year after the start of the war with Russia, with insurers facing at least half a billion dollars of claims.
Ship owners can claim a total loss for vessels stuck for a year from their insurers. When asked about the claims, Carnegie-Brown said, “That number, whatever it is, will begin to crystallize”.
The U.N. shipping agency, the International Maritime Organization (IMO), said the stranded ships remained a concern. “I will continue to actively pursue all avenues to develop, negotiate and facilitate the safe departure of vessels not covered by the Black Sea grain initiative,” IMO Secretary-General Kitack Lim said separately on Thursday.
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