Deep-water grain exports from Ukraine have effectively halted due to Russian attacks

Massive Russian attacks on Ukraine’s port infrastructure have effectively brought the country’s deep-water grain exports to a halt. Most major grain traders have suspended purchases of agricultural commodities on a CPT basis at deep-water ports, while several terminals have temporarily ceased operations, according to Bohdan Kostetskyi, Operating Partner at Barva Invest.

Virtually all major market participants have halted purchases for delivery to deep-water terminals. The situation has been further aggravated by shipowners refusing to call at Ukrainian ports following the latest attacks, citing force majeure concerns.

The disruption has already affected the domestic market. Since the beginning of the week, rapeseed purchase prices at Ukrainian crushing plants have fallen by around UAH 1,000 per ton. Grain prices have also declined, including bids from feed mills.

Traders are now factoring significantly higher logistics costs into their purchase prices as they increasingly rely on alternative export routes. In particular, grain shipments through Romania and other western corridors are considerably more expensive and have much lower capacity than Ukraine’s deep-water port logistics.

According to Kostetskyi, a complete and prolonged shutdown of maritime exports is unlikely, but operations are expected to remain severely constrained over the coming weeks. Under these conditions, farmers are likely to sell only minimum grain volumes needed to maintain liquidity while waiting for the logistics situation to stabilize.

The market response has already been reflected in the decisions of major companies. NIBULON informed suppliers that, due to attacks on seaports and civilian vessels, it reduced purchase prices at its elevators from 4:00 p.m. on July 15. The company also suspended grain purchases at the OZT DPZKU and TIS-ZERNO terminals from 2:00 p.m.

Kernel, whose assets have been targeted by Russian attacks three times over the past five days, also revised purchase prices at its TBT terminal in Chornomorsk. During the day, bid prices for Class 2 and Class 3 wheat, as well as corn, were reduced by UAH 200/t to UAH 10,200/t, while Class 4 wheat fell to UAH 9,700/t and barley to UAH 9,150/t.

Tags: Ukraine, export, prices, wheat, war