Operations Halted at Two Grain Terminals in Novorossiysk

Two large grain terminals in Novorossiysk, a Russian Black Sea port, have ceased operations following an attack on the night of August 12. This has disrupted the logistics of Russian grain exports. The Novorossiysk grain terminal and NKHP have been affected and have stopped operations, with the terminal owners acknowledging the damage. Novorossiysk is a key hub for maritime grain exports in southern Russia, and a significant amount of grain is exported through this region. The Sea of Azov route is restricted due to drone attacks and safety concerns, and Russia is considering alternative logistics. Grain exports require a combination of port, rail, and truck transport, and the halt in port operations can lead to shipment delays, storage pressures, and bottlenecks in inland transport. Novorossiysk is facing increased burdens due to restrictions in the Sea of Azov and the Kerch Strait, with some volumes heading to deep-sea terminals in the Black Sea. On July 22, the entry and exit of vessels at the port were temporarily banned due to concerns over Ukrainian drone attacks. On August 4, the cargo ship Nadezhda was attacked, injuring three crew members. In response to market reactions, the September futures for wheat on Euronext rose by 4.5% following news of the nighttime entry and exit restrictions in Novorossiysk in July. Grain futures also increased after the August 12 attack. The Russian Foreign Ministry claimed that this attack would raise global food prices and lead to grain shortages. The UN Security Council warned that if attacks on civilian vessels continue, global food markets and navigation safety could be jeopardized.

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