Grain export problems threaten Ukraine’s autumn planting campaign

The disruption of Black Sea exports and a sharp decline in domestic grain prices could create serious problems for Ukraine’s autumn planting campaign. Limited opportunities to sell the new crop are depriving farmers of the working capital needed to purchase seeds and other inputs.

According to Kyiv School of Economics associate professor Oleh Nivievskyi, Ukrainian farmers normally use around 50% of proceeds from crop sales to finance autumn planting. This year, securing the necessary liquidity has become much more difficult due to lower prices and a sharp reduction in grain sales.

The situation is being exacerbated by the accumulation of the new crop. Ukrainian grain exports fell by around 75% year-on-year in the first two weeks of August, while the shortage of grain storage capacity could reach 11 mln tons. Meanwhile, the corn harvest, estimated at around 33 mln tons, has yet to begin.

Excess supply is already putting additional pressure on the domestic market. According to Nivievskyi, grain prices in Ukraine are significantly below world market levels and in some cases do not cover production costs. As a result, some farmers may even have to assess whether harvesting their crops is economically viable.

Ukraine is currently unable to fully replace its Black Sea export route with alternative logistics. Low water levels are restricting shipments via the Danube, while railway infrastructure continues to suffer from Russian attacks. According to Agriculture Minister Taras Vysotsky, the Danube and railways combined can handle only around one-third of the volumes previously exported through Ukraine’s Black Sea ports.

Tags: Ukraine, export, grain, planting