Ukraine defies Russian threat of naval attack as container vessel leaves Odesa

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A container ship left Odesa port for Istanbul on Wednesday, the first vessel to leave Ukraine’s ports since Russia threatened to attack civilian shipping in the Black Sea last month.

The ship embarked from Odesa shortly after Russia attacked one of Ukraine’s two Danube river ports for the third time since July, destroying and damaging granaries and warehouses, Odesa’s governor Oleg Kiper wrote on Telegram.

The signal of the ship, which is carrying more than 30,000 tonnes of cargo including foodstuffs, was not being picked up a few hours after its departure, said maritime data analysts Spire Global.

Benchmark wheat prices rose 1.4 per cent to $6.06 a bushel on Wednesday over the heightened risk to Ukrainian grain exports. Grain prices have fallen from more than $10 a bushel just over a year ago and are lower than before the collapse of the grain deal because of bumper harvests in Russia and other food producers.

Following its withdrawal from a UN-brokered grain export deal in July, Russia said all civilian vessels travelling to and from Ukraine’s ports would be regarded as military targets. Since the deal broke down, Ukraine has been using its two Danube river ports, Reni and Izmail, to transit grain via a canal to the Romanian port of Constanța, from where they can be shipped at sea.

Despite Russian threats, the Hong Kong-flagged vessel called the Joseph Schulte was making its way through an established civilian vessel corridor, according to Oleksandr Kubrakov, Ukraine’s infrastructure minister.

The Joseph Schulte is co-owned by Bernhard Schulte, a German company, and an unnamed Chinese bank. The company said the vessel was using the route submitted by Ukraine on August 10 and accepted by the International Maritime Organization, travelling via Ukraine and Romania’s territorial waters to Istanbul.

The ship, which docked at Odesa on February 23 2022 — a day before Russia’s full-scale invasion of Ukraine, is being operated by a Ukrainian crew, the company added.

“If Russia decides to escalate, then it will go into a direct confrontation with Germany and its Chinese allies,” said Gennadiy Ivanov, director of BPG Shipping, a Ukrainian dry bulk shipping company that operates from Odesa, Dubai and Greece.

Ivanov said more ships would use the route if the attempt worked.

“Ukraine doesn’t have another option and everyone knows that. There’s a lot of grain that needs exporting through [Ukrainian Black Sea ports]. The Danube can’t cope with it all,” said Ivanov.

Ukraine has been increasingly using Reni and Izmail on the Danube to continue exports. Russia fired warning shots at a Turkish vessel trying to reach Izmail on Sunday, according to its defence ministry. Before the war, the ports were rarely used but when the Black Sea Grain Initiative was in operation they accounted for a third of Ukraine’s grain exports.

Romania plans to double the amount of Ukrainian grain exports via Constanța, by hiring more staff and finalising infrastructure projects to help ease the passage of vessels through the Danube’s Sulina canal, its transport minister Sorin Grindeanu said on Tuesday. The canal connects Constanța with the two Ukrainian ports across the border. 

The price of grain overall remains well above average levels between 2015 and 2020.

Additional reporting by Harry Dempsey in London