Ukraine May Lose $6 Billion in Grain Exports with Ports Blocked


By Silvia Aloisi and Pavel Polityuk

LVIV, March 21 (Reuters) – Ukraine faces a potential grain income lack of $6 billion because the blockade of its ports by Russian forces prevents it from promoting thousands and thousands of tonnes of wheat and corn that had been earmarked for export by June, a senior business official stated.

Nations that depend on imports of Ukrainian wheat – together with Egypt, Turkey and Yemen – might want to discover various provides, assist companies have warned.

Ukraine, a significant producer of grain and oilseeds, exports 98% of its cereals by way of its ports and solely a fraction by rail, the place prices are increased.

The nation was the world’s fourth largest grain exporter within the 2020/21 season whereas Russia ranked third, Worldwide Grains Council knowledge exhibits. The 2 nations mixed accounted for 22% of worldwide exports.

However with Russian warships off Ukraine’s southern coast stopping cargo ships from leaving the ports, together with the key hub of Odesa on the Black Sea, grain exports have all however floor to a halt because the begin of the warfare on Feb. 24. 

Ukrainian maritime officers stated preventing had left round 100 foreign-flagged vessels stranded within the nation’s ports.

“We’re sitting on a possible lack of $6 billion,” Mykola Gorbachev, chairman of the Ukrainian Grain Affiliation, informed Reuters.

He stated the nation had round 20 million tonnes of wheat and corn nonetheless to export from the 2021/22 season, which ends in June, at a mean worth of round $300 per tonne.

He stated there was no manner Ukraine may transport that sort of quantity by prepare, because the railway had a throughput capability of some 600,000 tonnes per 30 days, a tenth of what ports dealt with earlier than the warfare. 

Ukraine exported round $27 billion in agricultural merchandise 

in 2021, making up about half of its whole export revenue.

“Now we’re simply shedding this sector,” Gorbachev stated.

The World Meals Programme stated on Friday that meals provide chains in Ukraine had been collapsing, with key infrastructure similar to bridges and trains destroyed by bombs and plenty of grocery shops and warehouses empty.

Russia, which has been hit by Western sanctions and has imposed export curbs, had been the world’s prime wheat exporter in 2020/21 however could lose that mantle to the European Union within the present 2021/22 season, in response to IGC forecasts.

The Ukrainian disaster will add additional gasoline to already rampant meals inflation following international provide chain issues attributed to the COVID-19 pandemic. 

The United Nations meals company reported this month that world meals costs hit a file excessive in February, posting a 20.7% year-on-year rise. 

Whereas Ukrainians who usually are not trapped in besieged cities like Mariupol or Kharkiv within the east usually are not at a direct danger of meals shortages, the warfare may disrupt agriculture for a very long time.

Gorbachev stated Ukrainian farmers may additionally be pondering twice earlier than sowing new crops out of concern for his or her security but additionally as a result of their grains may go unsold if the warfare continues.

Ukrainian farmers – who produced a file grain crop final yr – say they’re wanting fertilizer for the dormant winter wheat planted final autumn, they usually additionally lack enough gasoline to energy their tools. 

In the meantime the brand new crops of corn and barley have to be planted over the subsequent month or will probably be too late, Gorbachev stated. 

On the weekend, presidential adviser Oleh Ustenko stated Ukraine could not produce sufficient crops to export if the invasion disrupts this yr’s sowing campaigns.

“Ukraine has sufficient grain and meals reserves to outlive for a yr, but when the warfare continues … (it) won’t be able to export grain to the world, and there can be issues,” he stated. 

The nation has began sowing spring grain in some areas however no mass sowing marketing campaign has but began, deputy agriculture minister Taras Vysotskiy informed Reuters final week. 

(Reporting by Silvia Aloisi; Enhancing by Veronica Brown and David Gregorio)

(c) Copyright Thomson Reuters 2022.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button