Istanbul-based tanker operator Palmali has plans to increase its shipments of Ukrainian sunflower oil, the company’s chairman was quoted as saying in a report by Reuters.
As part of its plans, the company would be ordering 10 more cargo carriers and planned to start trading operations early this year, Mubariz Mansimov said.
Since pulling out of the United Nations(UN)-brokered deal that had guaranteed safe shipment of Ukrainian food products in July, Russia had been attacking Ukrainian ports. and Several ships using Ukraine’s new Black Sea shipping lane had also been hit with mines, the 12 December report said.
“We signed an exclusivity agreement with top sunflower and grains trader Potoky for 2024, meaning extra volume,” Mansimov said.
“Palmali aims to ship 90% of Ukraine’s sunflower oil exports from the Danube. And after attacks, we could see less ships calling at Ukraine’s ports.”
Despite the conflict, Ukraine had maintained its leading role in the global sunflower oil market partly due to high transportation costs that had led some farmers and traders to prioritise higher-value products such as sunflower oil over bulkier items such as corn, Reuters wrote.
According to US Department of Agriculture (USDA) forecasts, Ukraine will export 5.6M tonnes of sunflower oil in the current 2023/24 season, representing about 40% of global trade.
Palmali loads sunflower oil and grain from Ukraine – mainly from Danube ports – as well as coal and grain from Russia. It also delivers diesel fuel to Ukraine’s power plants using the new route.
The risk of mines and war-risk insurance made shipping costly, although without the long inspection times imposed by the UN-brokered corridor, Mansimov said.
“We notify the Russian side of our passage. Palmali shares both Russia’s and Ukraine’s shipping risks,” Mansimov added.
The bulk of the company’s shipments – which started shortly after Russia’s invasion in 2022 – from Ukraine comprised sunflower oil, the report said.
“We now ship about 65%-75% of Ukraine’s sunflower oil exports through the Danube, with a minimum monthly loading of 100,000 tonnes,” Mansimov said, estimating Ukraine’s Danube exports at 160,000-170,000 tonnes/month.
Palmali also said it was planning to start trading operations in January, mainly to European and Asian markets.
The company handled about three-quarters of Turkey’s sunflower oil imports. Most of the Russian coal and grain shipped by the company also went to Turkey, Mansimov said.
Palmali operates about 30 ships, mostly chemical tankers between 2,000-20,000 tonnes. The 10 new vessels – 15,000-tonne mixed cargo carriers – would be able to carry both wet and dry cargo, the report said.
“That way we will be able to deliver Ukrainian oil directly to Asia and ship palm oil to Turkey or Ukraine on the way back,” Mansimov said.
The company had stopped shipping crude oil and was now transporting only non-sanctioned goods, Mansimov added.