Freight rates for the transportation of Ukrainian grain by sea affect its competitiveness

At the beginning of the launch of the Ukrainian grain corridor, freight rates were sky-high, as not everyone was ready to call at Ukrainian ports. However, the more successful vessel passages there were, the faster the freight rates decreased. Analysts predict that this downward trend will continue in the future.

This was reported by Maxim Kharchenko, logistics market analyst at UkrAgroConsult, during the Black Sea Grain. Kyiv 2024 Conference.

The directions in which Ukraine is not losing are, for example, the export of 30 thousand tons of corn to Spain: the freight for transportation from Odesa costs $32/t, while the freight from Constanta is only $20/t. The difference of $12 is primarily due to military risks, and the trend is not yet heading for a price reduction. This affects the competitiveness of grain, especially if it is shipped to China: then another premium appears for the passage of the Red Sea.

The analyst noted that Houthi attacks on merchant ships are still taking place in the Red Sea. It is known that some French companies are already transporting wheat to Asia bypassing Africa, through the Cape of Good Hope. However, Ukrainian ships are still moving through the Red Sea. Maksym Kharchenko expressed hope that the situation in the Black and Red Seas will be calm in the coming months, so freight will become cheaper.

Tags: Ukraine, logistics, Black Sea grain corridor