Strip of land key to expanding Ukraine grain shipments, major exporter says

By Rod Nickel

MYKOLAIV, Ukraine (Reuters) – The owner of Nibulon, one of Ukraine’s biggest grain exporters and growers, said on Thursday that expanding the Black Sea grain corridor to Mykolaiv ports made little sense until Ukraine regained control of a narrow strip of land occupied by Russia.

Ukraine will officially call on Turkey and the United Nations this week to start talks to extend the Black Sea grain deal for at least one year and include Mykolaiv.

For ships to leave Mykolaiv and enter the Black Sea, they need to pass the Russia-controlled Kinburn Spit. Even if Russia agrees to add Mykolaiv, vessels may be unsafe until Ukraine controls the spit, Nibulon owner and CEO Andriy Vadaturskyi said.

“Everybody should be concerned because they are not honest people and if they agree, they (deserve) no trust,” Vadaturskyi told Reuters. “What I am afraid of is more provocation.”

On Wednesday, Yuriy Vaskov, Ukraine’s deputy minister of restoration, said he did not see Russia’s occupation of the Kinburn spit as an obstacle to adding Mykolaiv’s ports, since Russia would need to agree not to attack ships carrying agricultural products.

The deal brokered by the UN and Turkey last July allowed grain exports from three Ukrainian deepwater ports in the Odesa region and will expire in mid-March unless extended.

Ukraine is one of the world’s largest grain exporters, and disruptions to shipments caused by the war have interrupted supply chains around the globe and contributed to turbulence in the global food market, which has since eased.

Vadaturskyi said there were two other important steps before reopening Mykolaiv, including allowing vessels stranded there to move, and boosting ship inspections to clear a grain backlog.

At Russia’s current inspection pace, “there is no space for Mykolaiv, because you’re not utilizing fully the capacity of the ports which already exist” under the deal, Vadaturskyi said.

Ukraine has repeatedly accused Russia of deliberately delaying inspections of ships carrying Ukrainian agricultural goods. Russia denies the accusation.

Mykolaiv accounted for 35% of Ukraine’s food exports before last year’s invasion.

A major wheat and corn exporter, Ukraine’s grain exports dropped 28.4% to 30.8 million tonnes so far in the 2022/23 season as of Feb. 22, due to a smaller harvest and logistical problems.

Vadaturskyi became CEO after his father, Nibulon founder Oleksiy Vadaturskyi, and his mother were killed in a Russian missile strike on his home in Mykolaiv last year.

(Reporting by Rod Nickel in Mykolaiv, Ukraine; Editing by Mike Collett-White and Bernadette Baum)