Russia Lets Grain Ships Leave Azov Sea for First Time Since July as Exports Shift to Arctic

Two laden vessels have already passed through the Kerch Strait, according to Reuters. Bloomberg, citing three people familiar with the situation, reported that the temporary permits cover grain carriers from Temryuk and Kavkaz.

Reuters sources said there is an instruction to begin customs clearance for ships fully ready to depart, with departure expected to be allowed between November 1 and 15, according to unofficial information. Two agency sources said the move involves withdrawing, under convoy, vessels that had long been idle with cargo aboard. The Transport Ministry did not respond to Reuters' request for comment.

The permission does not mean a return to previous export volumes. Merchant ships crossing the Black Sea still risk being hit by drones. Bertrand Esterle, vice president of the brokerage StoneX, told Bloomberg that few believe the risk assessment will change substantially after the ports reopen.

Shipping in the Azov Sea was restricted on July 10 amid escalation in the region. That halted shipments from Don ports, then the port of Kavkaz was stopped, and from mid-July shipments from deep-water Black Sea terminals were cut to a minimum, with some of them damaged. Before the restrictions, the Azov-Black Sea basin accounted for about 80% of Russian wheat exports.

The paralysis of southern ports drove exports to a 17-year low. Russia exported 1.7 million tonnes of grain in September, almost four times less than a year earlier, according to The Insider. SovEcon estimates September shipments at 1.8 million tonnes, while Reuters cites a figure of 60 million tonnes of grain a year that were shipped through southern ports before the restrictions. Wheat shipments fell fourfold, to 347,000 tonnes a week, according to calculations by the Russian Grain Union. Krasnodar Krai and Rostov Oblast, which produce every fifth tonne of the country's harvest, introduced states of emergency.

Amid reports of resumed grain-carrier traffic, Chicago wheat futures fell 2.8% on Wednesday, reaching their lowest level since July 1.

At the same time, Russia has begun using an alternative route through Murmansk, Reuters reported. The Arctic port is being used for grain exports for the first time. The Murmansk Commercial Seaport and Demetra Holding announced the start of loading of a first batch of 3,400 tonnes. According to shipping services and a Reuters source on the grain market, about 28,000 tonnes of wheat are also planned to be loaded in Murmansk onto a vessel bound for Casablanca in Morocco.

Russia had previously redirected grain exports mainly through the Baltic Sea. In September, Baltic ports handled 1.2 million tonnes, more than 60% of all Russian seaborne grain exports. Russian officials have cited the risk of "unfriendly actions" by European NATO countries in the Baltic Sea.

Deputy Foreign Minister Alexander Alimov said this week that Russia is considering various proposals to ensure the safety of grain transportation through the Black Sea and is in contact with Turkey on the matter. In 2023, Russia withdrew from the grain deal concluded a year earlier with the mediation of Turkey and the UN. The agreement provided for the safe export of Ukrainian grain through the Black Sea. Moscow cited obstacles to Russian food and fertilizer exports as its reason for withdrawing.