Russia repurposes Baltic and Arctic ports for grain exports

Following a series of drone attacks on Ukrainian Black Sea ports, Russian companies have repurposed fertilizer, coal, and other cargo terminals in Baltic and Arctic ports to handle grain exports, according to Reuters and Marine Insight.

Repurposing of Terminals

Russian companies have been re-purposing terminals at the ports of Ust-Luga and Murmansk on the Baltic Sea, as well as Murmansk in the Arctic. The Ust-Luga terminal, which handles mineral fertilizers, has been quickly adapted to handle grain shipments, according to an industry source. Modul and BSMZ terminals in St. Petersburg, which previously did not handle grain shipments, are now taking grain, further expanding the capacity of these terminals.

One of the largest terminals involved is the Ultramar terminal at Ust-Luga. The private terminal, with a declared capacity of 37 million metric tons, was previously used for mineral fertilizers but now handles grain shipments after the Black Sea route was disrupted. Rail transport applications for grain deliveries to the terminal in September reached about 260,000 metric tons, destined for markets like Egypt and Saudi Arabia, according to market sources.

Capacity and Logistics

The existing combined grain handling capacity of Russia's Baltic ports is estimated by analysts at between 2 and 7 million metric tons, which is significantly lower than the 60 million tons in the south. This repurposing of terminals could significantly increase the export potential of Russia's Baltic ports. The use of converted terminals will not influence Russia's fertilizer exports, as one industry source noted.

The repurposing also includes the Murmansk port, located 2,700 kilometers from Novorossiysk, the main grain export gateway. The port plans to use a direct-transfer system, moving cargo from railcars straight into ships' holds, a method usually used for potash exports. The port is adapting its conveyor systems to handle larger grain volumes, adding to the overall capacity.

Impact and Analysis

The diversification of Russia's grain export routes is a strategic move to mitigate the impact of the ongoing Black Sea route disruptions. This repurposing of terminals is expected to reduce dependency on the Black Sea ports, which saw a drastic reduction in operations due to continuous drone and missile strikes from Ukraine. As a result, domestic grain prices have fallen, and there is a build-up of unsold stocks.

The Russian government has been actively seeking alternative routes for grain exports. The Murmansk port, for instance, is now using equipment typically used to load fertilizer to start shipping grain, highlighting the urgency of restoring export flows.

What this means for operators

Ship operators should be aware of the new routes and terminals that have been repurposed for grain exports. The increased capacity and potential for grain shipments from Baltic and Arctic ports could provide new opportunities for vessel charters. Additionally, the diversification of routes may lead to more frequent transits through the Northern Sea Route, which could impact navigation and safety in the Arctic.