FESCO Pauses Black Sea Orders After Drone Attacks

Last week's Ukrainian drone attack on one of its vessels has forced Russian logistics and shipping group FESCO to suspend accepting new shipment orders via the Black Sea, the company said on Tuesday.

The announcement highlights the growing disruption to shipping from a sharp escalation of attacks on each other's vessels by both Russia and Ukraine, which has pushed wheat prices higher on global markets.

Russia's state nuclear corporation Rosatom, which owns 92.5% of FESCO, said earlier that the vessel Yanina, which was transporting goods such as frozen food and construction materials, was damaged by Ukrainian seaborne drones and sank in the Black Sea overnight from Friday to Saturday.

FESCO is one of the biggest Russian logistics operators, specialising in container shipments by rail and sea.

Russia, the world's largest wheat exporter, has also reported attacks on its agricultural export facilities and commercial vessels in the Black Sea in recent weeks.

Russia's main grain lobby group told Reuters last week that Ukrainian drone attacks on Russian ships and ports could shut down grain exports via the Black Sea in the near future, pushing up prices even further.

Both Russia and Ukraine say they only strike military-related targets.

Ukraine's farm minister told Reuters that alternative grain export routes from Ukraine would reach required capacity at the end of August at the earliest, covering only half of volumes handled by Black Sea ports disrupted by Russian attacks.

In July, Ukraine recorded 35 attacks on its vessels in ports and 22 on those at sea, as well as 67 strikes on port facilities.

(Reuters)