Russian attacks on civilian ships and port infrastructure have effectively stopped traffic to the ports of Greater Odesa. Ukraine is expanding exports by rail, highways and via the Danube. However, these routes will only be able to provide about half of the throughput capacity of Black Sea ports. This poses a threat to the export of Ukrainian crops and the stability of world food markets.
This was stated by the Minister of Agrarian Policy and Food of Ukraine Taras Vysotsky in an interview with Reuters.
According to him, the blocking of sea exports fell on the period of active harvesting, when agricultural producers need to store products, finance autumn sowing and fulfill export contracts.
“The situation is extremely difficult. According to some indicators, it is even more difficult than in March-April 2022. Due to the suspension of maritime logistics, domestic prices for grain and oilseed crops have already decreased by an average of 30%, and direct losses to the agricultural sector this year may reach from $1.5 to $3 billion,” Taras Vysotsky emphasized.
One of the first government decisions to support producers was to adjust the mechanism for determining the minimum allowable export prices for grain and oilseed crops. The government is also working on financial and logistical instruments that should help farmers avoid forced sales of their crops at a lower cost.
The main alternative routes remain railways, road transport and Danube ports. It will take at least until the end of August for these routes to reach a stable level of operation. At the same time, their total throughput capacity will be only about 50-55% of the volumes of the ports of Greater Odesa, through which Ukraine could export about 6 million tons of products every month.
The situation is complicated by drought and historically low water levels in the Danube. Because of this, the Danube route will not be able to significantly increase transportation volumes at least until October.
“Ukraine provides about 6% of world wheat exports and 11% of corn exports, and also remains one of the leading suppliers of oilseeds and vegetable oils. Further blocking of Black Sea ports may reduce supply on international markets and cause an increase in world food prices. The uninterrupted operation of the ports of Greater Odesa is a key condition for the supply of Ukrainian agricultural products and maintaining global food security,” the minister emphasized.
Taras Vysotsky called on international partners to promote the safety of shipping in the Black Sea. According to him, even after the resumption of vessel operations, Ukraine will need at least a month to return exports to previous volumes. (Agrarian Ministry)