Mykolaiv Port may join the "grain corridor". What does it take and what would it bring to Ukraine?
The second most important commercial harbour of the country has a chance to resume operations
The second largest seaport in Ukraine – Mykolaiv – can be in operation and is physically ready to join the Black Sea Grain Initiative. The head of the Mykolaiv Oblast State Administration Vitaliy Kim said this in an interview with LIGA.net.
"It is possible. But this has to be the decision of the highest authorities. And of negotiations. Because they have to legally join this corridor in the first place. From a physical standpoint, it is already possible," Kim said. But he recalled that geographically the Kinburn Spit is very close to the Ochakiv Community, and there is a direct entrance to the seaports of Mykolaiv Oblast through this strait: "That is, it will make it impossible firing light weapons, AT missile systems, mortar and artillery shells at ships that would eventually pass through the grain corridor."
The liberation of Kherson a month ago gave a chance to use the infrastructure in the south of the country, which has been blocked by active hostilities and direct threat from the aggressor since March.
And Mykolaiv seaport, which could benefit from the opportunity to resume its operations after the significant rollback of the occupying force, could be first to take advantage of it. This helped to more actively relieve the domestic market from the surplus of agricultural products accumulated during the naval blockade in March – July. As of July, 20 million tonnes of transit stock were created in Ukraine, while the average annual level is less than 5-6 million tonnes. This was hampered by residual but very serious risks in certain areas of the southern front – on the Kinburn Spit.
The inclusion of Mykolaiv port in the Istanbul Agreement on the export of Ukrainian agricultural products was discussed along with the ports of Greater Odesa on the eve of the grain corridor's extension on November 19. But this proposal, as well as others that were put forward by the Ukrainian side – particularly, the one-year term of validity for the corridor and cutting inspection procedures – has not yet been taken into account.
Mind examined whether there are any prospects for the resumption of navigation from the second largest sea gate of Ukraine?
What is the importance of Mykolaiv port for export? In total, 153.076 million tonnes of cargo were processed in Ukraine's seaports in 2021. Of these, 118.1 million tonnes were shipped for export. As of year-end 2021, Mykolaiv Port (in particular, its entire infrastructure – Olvia, Nika-Terra, and Mykolaiv Port) ranked second in the seaport rating in terms of transshipment with a result of 30 million tonnes. This is 16% of the total cargo turnover of all ports of Ukraine.
During 2021, Mykolaiv seaport processed 1969 vessels, 122 among them were Panamax class, and 100,754 railcars. November was the most fruitful month in 2021, when 10% of the total annual volume was transshipped.
This port also leads the seed-oil transshipment with a result of 2.88 million tonnes, which is 36% of the total volume of oil processed by the ports in Ukraine.
Were any port facilities damaged during the shelling? Yes, they were. It is about the Nika-Terra grain terminal – it suffered significant damage during an attack in early June. Three grain elevators and loading mechanisms were destroyed.
Can Greater Odesa ports process at least agricultural cargo alone? In theory, yes, but it depends on the terms.
It will take at least 10 months to realise this season's full export potential only in terms of grain (about 50 million tonnes = current harvest + carry-over). Moreover, this estimate does not take into account the transshipment of other non-bulk agricultural cargoes and new harvest that will arrive.
If the sea export channel is excluded altogether, it will take a year and a half to unload the market by land, rail and through the Danube ports. Meanwhile, the early grain harvest of 2023 will begin to appear on the market in June.
Can the Danube ports become an alternative? A full-fledged one, they cannot. Infrastructure units are already working on the verge of their capacities.
Thus, cargo processing in the port of Bilgorod-Dnistrovsky has increased more than 100 times compared to the same period in 2021 since its operation as a logistics centre resumed in April.
"The port received more than 10,000 lorries and shipped over 4,000 railway cars, easing significantly the pressure on the road infrastructure in the ports of Izmail and Reni," said the port in a statement.
For six months, the company handled more cargo than for the last three years combined. At the same time, the Danube ports have a potential that is small or difficult to realise in terms of increasing transshipment scale.
Even if the terminals are upgraded and measures to increase transshipment are implemented, achieving the capacity of 2 million tonnes for the Danube will already be considered a success, according to experts of the Ukrainian Grain Association. Therefore, there is virtually no alternative to the resumption of the work of Mykolaiv Port.
How safe is the port in current conditions? The main risk factor for the operation of Mykolaiv maritime infrastructure is possible shelling from the Kinburn Spit.
Ships that geographically leave / enter the port must sail one kilometre off the Kinburn Spit, that is, within reach of the aggressor's artillery. "When the artillery cannot reach there, this [resumption of the port operation] will be a very urgent issue. We are getting ready," Vitaliy Kim said earlier.
The actual deployment of forces on the Kinburn Spit is unknown, the fighting is going on in the information silence mode. It was reported earlier that three settlements belonging to Mykolaiv Oblast remained to be liberated. After the de-occupation of this area, Mykolaiv Port will be able to fully participate in the export of grain under the Istanbul Agreement.
"The liberation of Kherson is certainly a victory. But [so far] it has not affected the shipment of grain from Kherson and Mykolaiv," says Mykola Gorbachov, President of the Ukrainian Grain Association, "The safety of the vessel and crew is a must have for the loading of the vessels to start. Unfortunately, while the russians are on the left bank of Kherson and occupy the Kinburn Spit, it will be difficult to guarantee the safety of navigation." In such conditions, insurance companies will not cover risks, and ship owners will not agree to enter risky waters without insurance.
How quickly can the work of ports be resumed after the military factor is eliminated? As soon as the Ukrainian military liberated the left bank of the Dnieper and the Kinburg Spit. Mykolaiv and Kherson are technically ready to resume work within a week.
Will Mykolaiv seaport be included in the Istanbul Agreement after the military risks are removed? Yes, it will, and the Ukrainian delegation in Istanbul works on this. "I believe that it is achievable," Mykola Gorbachov says.
As a reminder: Ukraine provides food for about 90-120 million people outside the country. That is why the UN and the entire civilised world react so promptly to the blockade of food cargoes from Ukraine caused by the russian aggression.
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