March 17, 2014

17/03/14: Grain uncertainty at Crimea ports

Ukraine is one of the world's largest suppliers of cereals, especially maize and wheat, and the Crimean ports are the main transit points for sending grain by sea. Crimea ports are somewhat paralysed due to the political issues between Ukraine and Russia and this is unsettling according to say Ukrainian authorities.

These problems are considered very serious as shipping may negatively affect the global grain market and lead to price rises and uncertainty.

Whilst some of the problems are relating to military maneuvering (Ukranian Ministry of Foreign Affairs said Russian military had stationed large anti-submarine ships near the port of Novoozernoe, completely blocking the channel) the implications to trade activities are immense.

Secretary of the port of Sevastopol, Andrey Telni, said, “The shipping is partly paralysed mainly because of psychological reasons. There is a possibility of conflict escalation, and some people are afraid of this. Now we have a situation on the peninsula where confrontation between the two or even three fleets – as Crimea has created its own fleet – must be considered,”

Mr Telni added “The navy is thus in a state of tension and wary of any possible provocations. And as is quite common, nobody really wants to go near the warships in such a situation.”

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