Ships entering the three ports, which have been part of the agreement, are usually required by their banks to have various insurance policies in place including hull and cargo war cover, which is renewed every seven days
London:
Insurers are no longer offering new cargo insurance cover for shipments out of Ukraine through a U.N.-backed safe corridor after Russia suspended its participation, industry sources said on Tuesday.
An export deal, agreed by Russia and Ukraine and brokered by Turkey and the United Nations in July, was meant to ease a world hunger crisis caused in part by Moscow’s invasion of Ukraine and an earlier blockade of its ports. While shipments have been moving out of Ukraine since Moscow’s announcement on Saturday, insurers are grappling with a changed risk environment and more uncertainty, sources said.
“It is imperative that ships already in the grain corridor do not become collateral damage, and are allowed safe passage,” Guy Platten, secretary general of the International Chamber of Shipping association, said on Tuesday.
“Furthermore, the safety of seafarers must remain a top priority, and all parties must give consideration to the crews who may now be stuck on board or in port due to factors beyond their control,” he said,
Ships entering the three ports, which have been part of the agreement, are usually required by their banks to have various insurance policies in place including hull and cargo war cover, which is renewed every seven days.
Lloyd’s of London insurer Ascot said on Monday it was suspending writing cover for new shipments. Since then, sources say other Lloyd’s underwriters have followed suit.
“Any shipments that come in to be quoted post yesterday will likely struggle to get coverage,” Ascot head of cargo Chris McGill told Reuters on Tuesday. “We’re trying to gather as much information as we can from multiple sources in order to create an appropriate solution that makes sense for all involved.”
Norwegian war risk insurer Gard said its focus was on doing what it could to support clients “in a turbulent time”.
Three industry sources said indicative rates for hull war cover had risen by half to 1.5% of the value of the ship on Tuesday, from around 1% on Monday, adding it was unlikely that any cover would be provided at the moment.
“Underwriters will be bearing in mind they won’t want to increase their exposure in the current situation. The hull insurers can quote but nothing is moving,” another source said.
According to ICS analysis, there are still 65 ships stuck in Ukraine, which includes other ports not part of the initiative as well as 346 seafarers.
Delegations from Ukraine, Turkey and the U.N. agreed not to plan any movement of vessels through the grain corridor on Nov. 2, the initiative’s joint coordination centre said on Tuesday.
Meanwhile, Russian President Vladimir Putin said said he is not ending its participation in a deal to export much-needed Ukrainian grain through Black Sea ports but rather is suspending it, on Monday.
Putin’s comments were his first since Moscow announced on Saturday it was freezing participation in the United Nations-brokered Black Sea agreement after what it said was a major Ukrainian drone attack on its fleet in Crimea.
“We are not saying that we are ceasing our participation in this operation. No, we are saying that we are suspending it,” Putin told a televised news conference.
Putin told his Turkish counterpart Tayyip Erdogan in a phone call on Tuesday that Russia could consider resuming a deal allowing grain exports from Ukrainian seaports only after completion of an investigation of drone attacks on the Crimean naval port of Sevastopol.
In a statement, the Kremlin said a resumption might be considered only after “a detailed investigation into the circumstances of this incident, and also after receipt of real guarantees from Kyiv of strict observance of the Istanbul agreements, in particular on the non-use of the humanitarian corridor for military purposes”.
It also said Putin had reminded Erdogan of “the failure to fulfil the second part of the package agreements – to unblock the export of Russian agricultural products and fertilisers to world markets”.
While these goods are not subject to the Western sanctions imposed in response to Russia’s invasion of Ukraine, Russian producers have lost access to the Baltic Sea ports that they had used for exports, and to a pipeline carrying ammonia to the Ukrainian Black Sea port of Pivdennyi, known as Yuzhny in Russian.
In its readout of Tuesday’s call, the Turkish presidency said Erdogan had told Putin he was “sure a solution-oriented cooperation will be established on this issue.
Putin said the Ukrainian drones had traveled through the same corridors the grain ships used.
“And thus they created a threat both to our ships, which must ensure the safety of grain exports, and to the civilian ships that are engaged in this,” he said. Kyiv has not claimed responsibility for the attack.
Other participants in the deal pressed ahead with export of grain on Monday, even though Russia said this was risky. “Ukraine must guarantee that there will be no threats to civilian vessels or to Russian supply vessels,” said Putin, noting that under the terms of the deal, Russia is responsible for ensuring security.
Reuters