Lloyd’s wades in to help cover Ukraine grain shipments

‘There is no lack of willingness on our part to provide cover. Is that more expensive? Yes, a bit’

BRITISH insurers are preparing to underwrite the dangerous sea transit of millions of tons of grain from Ukraine across the mine-laden Black Sea.

Lloyd’s of London insurers are to spearhead the private sector’s role in shipping crucial food supplies from the war-torn country.

John Neal, chief executive of the 334-year-old City institution, said Lloyd’s was “the first cab off the rank” when it came to providing cornerstone insurance that will unlock shipments.

“The cover is literally being put in place today,” Mr Neal said.

Global food prices have risen dramatically since Vladimir Putin ordered the invasion of Ukraine. Russia has blockaded Ukrainian ports in the Black Sea, trapping millions of tons of grain.

The two warring nations signed a deal on Friday to reopen grain and fertiliser exports to ease an international food crisis that has been growing since the start of the conflict. Some 30pc of wheat and 55pc of sunflower oil comes from the two countries, as well as 20pc of corn and fertilisers.

Despite ships travelling through the Black Sea facing the threat of Russian mines, Mr Neal said it was Lloyd’s of London’s “duty” to step up.

“There is no lack of willingness on our part to provide cover. Is that more expensive than it would normally be? Yes, a bit, but not a lot actually,” he said. “You are talking in the order of 15-20pc.”

The insurance will be provided on purely commercial terms with no state or government guarantees involved.

Mr Neal’s comments came as the insurance market published a report into the impact of the Ukraine conflict on the global economy.

It warned that China will seek to benefit from a protracted campaign in Ukraine by inserting itself into supply chains that have been disrupted by Western sanctions on Russia.

“Limited global supply of key products and goods [will lead] to inflationary pressures and persisting global recession,” the report said. “China, another key supplier, uses the supply bottleneck to amplify its own supply dominance.”

Were the war to escalate, China and India would also try to expand their banking systems to fill the gap created by Russia’s exclusion by Western payment operators, the report warns.

Mr Neal said: “There is little doubt that you have got a tectonic shift geopolitically.