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Ukraine could lose $6 billion in grain exports due to blocked ports

EconomyUkraine could lose $6 billion in grain exports due to blocked ports

Lviv (Times Of Ocean)- A senior industry official said Ukraine may suffer a $6 billion loss in grain revenue due to the blockade of its ports by Russian forces, which prevents it from selling millions of tonnes of wheat and corn that had been destined for export by June.
Aid agencies have warned that countries that rely on Ukrainian wheat imports – including Egypt, Turkey, and Yemen – have to find alternatives.
Ukraine, a major producer of grains and oilseeds, exports 98% of its cereals through its ports rather than by rail, where costs are higher.
The country was the world’s fourth-largest grain exporter in the 2020/21 season, with Russia ranked third. Together, the two countries accounted for 22% of global exports.
Due to Russian warships blocking Ukrainian ports, including Odesa on the Black Sea, grain exports have all but ceased since the war began on Feb. 24.
Ukraine’s maritime officials said around 100 foreign-flagged vessels were stranded in its ports as a result of fighting.
“We are sitting on a potential loss of $6 billion,” Mykola Gorbachev, chairman of the Ukrainian Grain Association, told Reuters.
Around 20 million tonnes of wheat and corn remain to be exported from the 2021/22 season, which ends in June, at an average price of around $300 per tonne.
Ukraine could not transport that volume by train, since the railway had a throughput capacity of about 600,000 tonnes per month, a tenth of what the ports handled before the war.
Ukraine exported around $27 billion in agricultural products in 2021, accounting for about half of its total export earnings.
“Now we are just losing this sector,” Gorbachev said.
According to the World Food Programme, Ukraine’s food supply chains are collapsing, with key infrastructure destroyed by bombs, such as bridges and trains, and many grocery stores and warehouses empty.
Despite sanctions and export curbs from the West, Russia had been the world’s top wheat exporter in 2020/21 but may lose that position to the European Union in 2021/22, according to IGC forecasts.
Following the global supply chain problems caused by the COVID19 pandemic, the Ukrainian crisis will exacerbate already rampant food inflation.
The United Nations food agency reported that world food prices hit a record high in February, rising 20.7% year-over-year.
Ukrainians who are not trapped in besieged cities like Mariupol or Kharkiv in the east are not at immediate risk of food shortages, but the war can disrupt agriculture for a long time.
As Gorbachev predicted, Ukrainian farmers may also be hesitant to plant new crops out of fear for their safety, but also because their grain could go unsold if the war continues.
Ukrainian farmers – who planted a record grain crop last year – say they are running low on fertilizer for the dormant winter wheat they planted last autumn, as well as fuel to operate their equipment.
Gorbachev warned that it will be too late if new corn and barley crops are not planted in the next month.
Ukrainian presidential adviser Oleh Ustenko said that if the invasion disrupts this year’s sowing campaign, Ukraine may not be able to export enough crops.
“Ukraine has enough grain and food reserves to survive for a year, but if the war continues … (it) will not be able to export grain to the world, and there will be problems,” he said.
In some areas, spring grain has been sown, but a mass sowing campaign has not yet begun, Agriculture Minister Taras Vysotskiy told Reuters last week.

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