The Russian Grain Union stated that the Turkish government’s request for an insurance letter of guarantee from the ships that will pass through the straits may increase food prices.
President of the Russian Grain Union Arkady Zlochevskiy stated that the decision of the Russian Grain Union to require the Turkish government to ask for an insurance letter of guarantee from the ships that will pass through the straits should not cover food products, otherwise it will be more difficult for Russian shipping companies to take out insurance and this will be reflected in the cost of the products.
Zlochevsky said, “Russian companies currently have insurance. But they became more expensive, and problems arose in concluding contracts. “If Turkey decides that only certain types of insurance can pass through the Bosphorus, this will greatly increase the losses for all Russian companies, including those in the agricultural sector,” he said.
According to the news, it was stated that Turkey will begin to request an insurance letter of guarantee, issued by the International P&I Clubs Group, from the ships that will pass through the Straits on 1 December.
Although a direct sanction decision has not been taken against Russia’s agricultural products, the export of these products is made difficult by obstacles such as significantly increasing ship insurance fees.
Sources familiar with the matter previously told Izvestiya that UN Secretary-General Antonio Guterres was in talks with major insurance companies to reduce insurance fees applied to ships carrying Russian agricultural products or departing from Russia’s Black Sea ports. However, it is stated that no results have been obtained from these talks yet.
New insurance terms affect 95 percent of global tanker fleet
Covering 95 percent of the global tanker fleet, the International Group of P&I Clubs is headquartered in London and dependent on Europe for reinsurance.
Accordingly, Russia may have serious problems in finding tankers to export oil by sea.
The opinions expressed herein are the author’s and not necessarily those of News2Sea.
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