Ukraine may face $6 bln loss in grain exports with blocked ports

According to a senior industry official, Ukraine could lose $6 billion in grain earnings as a result of Russian soldiers’ blockade of its ports, which prohibits it from exporting millions of tonnes of wheat and corn that had been planned for sale by June.

Aid agencies have warned that countries that rely on Ukrainian wheat imports, such as Egypt, Turkey, and Yemen, may need to find alternate supply.

Ukraine, a significant grain and oilseed producer, exports 98 percent of its grains through its ports and only a small portion via rail, which has higher expenses.

According to data from the International Grains Council, the country was the world’s fourth largest grain exporter in the 2020/21 season, with Russia in third place. Together, the two countries accounted for 22% of global exports.

Grain shipments have all but ceased since the start of the war on February 24, when Russian warships stationed off Ukraine’s southern coast prevented cargo ships from leaving ports, including the important hub of Odesa on the Black Sea.

Around 100 foreign-flagged vessels have been trapped in Ukrainian ports, according to maritime officials.

According to Mykola Gorbachev, chairman of the Ukrainian Grain Association, “we are sitting on a potential loss of $6 billion.”

He estimated that the country still had roughly 20 million tonnes of wheat and corn to export from the 2021/22 season, which ends in June, at an average price of around $300 per tonne.

He said that Ukraine could not move that number by train because the railway’s monthly throughput capacity was just 600,000 tonnes, a tenth of what ports handled before the war.

Ukraine’s agricultural exports were roughly $27 billion. “We are simply losing this area right now,” Gorbachev stated.

Food supply systems in Ukraine are failing, according to the World Food Programme, with essential infrastructure such as bridges and railroads devastated by bombings and many grocery stores and warehouses empty.

According to IGC projections, Russia, which has been battered by Western sanctions and has imposed export restrictions, was the world’s top wheat exporter in 2020/21, but may lose that title to the European Union in the current 2021/22 season.

Following worldwide supply chain challenges related to the COVID-19 epidemic, the Ukrainian crisis will add flame to already raging food inflation.

World food prices touched a new high in February, according to the United Nations Food and Agriculture Organization, with a 20.7 percent year-on-year increase. While Ukrainians who are not confined in besieged places such as Mariupol or Kharkiv in the east are unlikely to face food shortages in the near future, the war might damage agriculture for a long time.

According to Gorbachev, Ukrainian farmers may be hesitant to plant fresh crops out of worry for their safety, as well as the possibility that their crops will go unsold if the war continues.

Farmers in Ukraine, who generated a record grain crop last year, claim they are running out of fertiliser for dormant winter wheat planted last autumn, as well as fuel to power their equipment.

Meanwhile, Gorbachev stated that new corn and barley crops must be sown within the next month or it will be too late.

Oleh Ustenko, a presidential adviser, stated over the weekend that if the invasion interrupts this year’s planting campaigns, Ukraine may not be able to export enough crops.

“Ukraine has enough grain and food stockpiles to last a year,” he said, “but if the war continues, (it) will be unable to sell grain to the rest of the globe, causing issues.”

According to deputy agricultural minister Taras Vysotskiy, the government has begun seeding spring grain in select places, but no widespread sowing campaign has yet begun.


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