Up to 70 ships queue off Danube as bottlenecks slow Ukraine grain exports

By Pavel Polityuk

KYIV, Aug 26 (Reuters) - Up to 70 vessels are waiting near the Danube's Sulina Canal for access to Ukrainian ports to load grain for export, traders and analysts said on Wednesday, with a shortage of pilots and priority given to other cargoes creating long delays.

After Russian attacks effectively blocked Ukraine's Black Sea ports, which had handled 90% of the country's grain exports, some shipments were rerouted through Danube river ports, which have much lower capacity.

Grain cargoes are competing for access with higher-priority shipments such as fuel, slowing exports. Frequent air raid alerts, which force the suspension of all port operations, have added to the disruption.

Ukraine is one of the world's biggest grain exporters and disruptions to its shipments can drive up global prices.

'THE SITUATION COULD WORSEN'

"As of August 25, more than 50 vessels were waiting to pass through the Sulina Channel, while only five to seven vessels per day were moving towards Ukraine's Danube ports," consultancy ASAP Agri said.

The consultancy said on Telegram that each day of delay can cost up to $8,000, adding to already high freight rates.

"The situation could worsen if weather conditions deteriorate in the coming days," it added.

Katerina Kononenko, operations manager at Avalon shipping, said the Sulina Canal was expected to be closed for about two days because of poor weather.

"For the current situation, this is really a serious setback. Today, about 70 vessels are waiting at Sulina road. At the moment, the real traffic capacity of the Sulina Channel for vessels going to Ukrainian ports is only two to three vessels per day. This is very low," she added.

Ukraine also relied heavily on Danube ports earlier in the war when Russia blocked the ports of the Greater Odesa region. Grain export capacity through the Danube peaked at 2.5 million metric tons a month in 2022 to 2023.

Export volumes via the Danube remain well below those levels, although traders are gradually increasing shipments. State railway operator Ukrzaliznytsia said this month that grain transport volumes to Danube ports in August were 11 times higher than in July.

Agriculture ministry data show Ukraine exported 539,000 tons of grain from August 1 to August 21, compared with 1.73 million in the same period a year earlier.

(Reporting by Pavel Polityuk. Editing by Mark Potter)