Russia is diversifying grain export routes to Baltic and Arctic ports to counteract disruptions from Black Sea vessel attacks.
Russia is attempting to establish a new export route through its Baltic and Arctic ports due to the disruptions in grain shipments caused by attacks on ports and commercial vessels in the Black Sea. According to a report by Reuters based on five industry sources, fertilizer, coal, and general cargo terminals are being rapidly adapted to handle grain.
One of the prominent centers is the Ultramar terminal in Ust-Luga, which has an announced capacity of 37 million tons per year. The facility, which normally handles mineral fertilizers, has reportedly begun grain shipments since August; it is also being considered to redirect the cargoes of Demetra, one of Russia's major grain trading and logistics companies, to this route. The Modul terminal in St. Petersburg and the Murmansk Commercial Port are also among the locations being prepared.
In the previous export season, approximately 90% of the grain sent by Russia was shipped via the Black Sea. However, reciprocal attacks on Russian and Ukrainian ports and commercial vessels have increased war risk premiums while reducing port calls. Russian grain exports fell by 31% during the July-August period; industry forecasts indicate that September shipments may be only about half of what they were in the same month last year.
The ice-free port structure of Murmansk throughout the year and its ability to accommodate Panamax vessels are considered advantages for Russia. Conversely, transporting grain from production areas to northern ports by rail incurs additional costs such as longer domestic distances, wagon allocation, and product segregation at terminals. It is noted that Russian Railways is prioritizing grain shipments heading north and that state subsidies are being implemented.
This shift in direction cannot completely replace the Black Sea in a short time. However, if the attacks continue, the Baltic and Arctic routes could transition from a temporary solution to a permanent capacity, potentially altering the demand for grain ton-miles and the regional freight balance.
Source: SeaNews Türkiye
