Ukraine reports new attack on grain silos but cargo ship sets sail

Ukraine reports new attack on grain silos but cargo ship sets sail
# 16 August 2023 16:52 (UTC +04:00)

Ukraine said Russia had attacked its grain storage facilities overnight, but a container ship left the Black Sea port of Odesa on Wednesday despite Moscow's threat to target shipping after it abandoned an export deal, APA reports citing Reuters.

In the Russian capital, five sources said authorities were considering reimposing stringent capital controls as the rouble showed the strains of Russia's invasion of its neighbour, which has brought huge military spending and Western sanctions.

The departure from Odesa of the Hong-Kong-flagged Joseph Schulte, trapped in the port since the day before Russia invaded Ukraine on Feb. 24 last year, followed the latest in a string of Russian attacks on the country's grain export infrastructure.

Overnight air strikes damaged silos and warehouses at Reni on the Danube river, a vital wartime route for food exports, Ukrainian officials said. They posted photos of destroyed storage facilities and piles of scattered grain and sunflowers.

There was no comment from Moscow. An industry source said the port was continuing operations. Benchmark Chicago wheat futures were up about 1% after the news broke on Wednesday morning, adding to a slight earlier gain as they recovered from a two-month low on Tuesday.

Russia has made regular air strikes on Ukrainian ports and grain silos since mid-July, when it pulled out of the U.N.-backed deal for Ukraine to export grain. It has threatened to treat any ships leaving Ukraine as potential military targets. On Sunday it fired warning shots at a ship travelling towards Ukraine.

Despite the threats, Ukraine last week announced a "humanitarian corridor" in the Black Sea to release cargo ships that have been trapped in its ports by a de facto Russian blockade, pledging full transparency to make clear they were serving no military purpose.

"A first vessel used the temporary corridor for merchant ships to/from the ports of Big Odesa," Deputy Prime Minister Oleksandr Kubrakov said on Facebook.

Bernhard Schulte Shipmanagement (BSM), which owns the ship jointly with a Chinese bank, confirmed that the ship was en route to Istanbul.

Kubrakov said it was carrying more than 30,000 metric tons of cargo in 2,114 containers, adding that the corridor would primarily be used to evacuate ships from the Black Sea ports of Chornomorsk, Odesa and Pivdennyi.

Moscow has not indicated whether it would respect the shipping corridor, and shipping and insurance sources have expressed concerns about safety.

Ukraine is a major grain and oilseeds exporter and the United Nations says its supplies are vital to developing countries where hunger is a growing concern. Neither Kubrakov nor the shipping company specified the cargo on board the Joseph Schulte but grain is rarely carried in containers.