Ukrainian farmers and grain exports hit hard by Russian blockade of Black Sea ports

By Rostyslav Averchuk

Lviv (EFE).- Ukraine is urgently seeking solutions as Russia’s blockade of Odesa ports chokes grain exports at the peak of the harvest, despite efforts to scale up alternative routes.

In the first 12 days of August, Ukraine exported only 590,000 tonnes of grain, about 30% of the needed volume, Agriculture Minister Taras Vysotskyi told journalists on Friday.

For over three weeks, cargo ships have not been entering Ukraine’s Black Sea ports, which normally handle 90% of exports, following 67 Russian attacks on the ports and 57 strikes on ships in July alone.

Farmers under pressure

The situation facing Ukrainian farmers is “critical,” Pavlo Koval, Director General of Ukraine’s Agrarian Confederation, told EFE.

“About 65 million tonnes are to be exported in a year, which means 6 million tonnes every month. Even if we scale up exports fast through alternative routes, we will only cover 45-50% of the need,” Koval said.

The inability to export the new harvest and rising logistical costs are putting heavy pressure on farmers who need funds to repay loans and cover other costs as they prepare to sow their fields for winter, yet face “unprecedentedly low” prices for their produce inside Ukraine.

Farmers are also looking for ways to store 10-12 million tonnes of the new harvest.

According to Vysotskyi, foreign partners have confirmed about 10 million dollars in funding for temporary grain storage facilities, such as polymer sleeves placed on fields, to store 2-2.5 million tonnes. The World Bank is expected to provide the 25 million dollars needed to store over 6 million tonnes.

This will cover immediate needs for wheat, Koval noted. However, part of the crops, such as corn, will remain in the fields, running the risk of spoiling.

Such storage will not help farmers near the front line who face daily drone strikes and fires, said Igor Yosypenko from the Kherson region.

Ukraine also requested 220 million euros from the EU to cover the cost of refinancing farmers. This support must arrive quickly, as farmers need the funds to continue operations.

In search of solutions

A similar blockade in 2022 cost the Ukrainian economy about 6% of GDP. This time, losses could be even higher, according to Oleg Nivievskyi of the Kyiv School of Economics.

Currently, about 45% of Ukrainian agricultural exports move by rail, another 45% via Danube ports, and about 10% by road, Minister Vysotskyi told journalists on Friday. Ukrainian businesses and the state are also working with European partners to increase transit capacity, expert Koval said.

However, the route through Hungary is already jammed, Danube exports are suffering from historically low water levels, and potential railway shipments through Moldova remain at a very early stage.

Ukraine has lost around 30% of its railway transportation capacity to Russian strikes, and routes through Poland to Baltic Sea ports are unlikely to expand amid tensions between the countries, experts say.

The situation is dynamic, Koval noted, yet the urgent measures will at best “minimize” the losses suffered by Ukrainian farmers and potential price spikes on global markets, given Ukraine’s role as a leading exporter.

“While bigger producers have more capacity to absorb the losses, many small producers will likely have to exit the industry,” Koval warned.

War of attrition

The increase in Russian strikes on Odesa ports and civilian ships has coincided with Ukraine’s attacks on Russian tankers and ports in the Black and Azov seas, as both sides seek to deprive each other of the resources needed to wage the war.

As of Thursday, Russia rejected calls by Turkey, a key shipowner involved in transportation from both Ukrainian and Russian ports, to stop mutual attacks in the Black Sea.

“We have succeeded in blocking off Russia’s south, and we are expanding this strategic operation, quite rightly, in response to Russian strikes on our ports and our cities,” Ukrainian President Volodymyr Zelenskyy said in his address on Friday night. EFE

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