Losses due to vessel downtime in the “Black Sea grain corridor” queue reached USD1 billion

The losses incurred by Ukraine due to the downtime of ships in the grain corridor queues amounted to more than USD 1 billion, said Mykola Gorbachev, president of the Ukrainian Grain Association (UGA). “This is the money that Ukrainian farmers have not received. This is the money that traders paid to ship owners for standing in line for a very long time,” he explained on FreeDom.

Gorbachev noted that the Russian Federation does not accept Ukraine’s plans and conditions for the formation of the order of inspections of ships in line, which prevents port terminals from working rhythmically.

According to the UGA president, the grain corridor is a very effective channel for the supply of Ukrainian agricultural products abroad, as 50% of all exported agricultural products were shipped to customers through it. The remaining 50% was exported via alternative routes: across the Danube, by rail, and by road.

Speaking about the shutdown of the Pivdennyi seaport and its exclusion from the grain corridor, Gorbachev noted that this was “another victory for Russia in the bidding” that is taking place as part of the talks in Istanbul to resume exports of Ukrainian agricultural products by sea, and expressed hope that a way out of the situation would be found.

“Russia manipulates any data. It is trying to introduce any turbulence (into the negotiations) to make everything unpredictable. The Pivdennyi port is one of the most efficient in terms of grain shipment. Accordingly, it has been the busiest,” he explained, adding that the issue of exporting Ukrainian agricultural products from the port has not been resolved.

Speaking about the Ukrainian grain stolen by the Russian side, Gorbachev said that all the facts of the theft are documented by the Ministry of Foreign Affairs of Ukraine, which knows the names of all the crews of the ships that transport it. “I am confident that Ukraine will receive compensation for all the stolen grain,” he emphasized.

According to the UGA, about 4 million tons of grain have been stolen from Ukraine since the beginning of the full-scale invasion. Sanctioned countries have become its buyers. But they are also cautious about the grain stolen from Ukraine. In particular, there was a case when Libya refused to buy it, Gorbachev said, adding that it is becoming increasingly difficult for Russia to trade stolen goods.

“The ships come for the stolen grain like criminals – at night: they disable GPS trackers, pass through like invisible men, load up, and then leave in an unknown direction. However, the marine traffic program allows us to track where these ships are going, how much and what they are carrying. Ukraine records all the facts,” he explained.

The UGA President pointed out that Russia steals not only Ukrainian grain, but also buyers. “During the war, Russia is using the mechanism of blocking Ukraine as a major exporter to work in the countries of our traditional sales. While Ukraine pays billions for downtime, Russia has no downtime. Their offer may seem better to the client,” Gorbachev said.

According to him, this is how Russia has strengthened its position in the market of Egypt, the largest wheat importer, where it has increased supplies. Grain buyers need rhythmic supplies to keep their mills running. The flour produced by them is needed to bake bread. The buyer is forced to choose a more reliable supplier, which is the main reason why Ukraine has lost its grain markets, explained the UGA president.

He confirmed that Ukrainian grain traders are waiting for the ports in Mykolaiv to be unblocked, where there are 11 modern terminals that could export about half of all supplies by sea. However, grain traders realize the difficulty of implementing this initiative due to the occupation of one side of the Dnipro River by the Russian military, from where ships can be shelled.

Speaking about the 2023 grain harvest forecasts, Gorbachev noted that a decline in production to 65 million tons of grains and oilseeds does not threaten Ukraine’s food security at all, as 24-25 million tons of grains are enough to meet the needs of the domestic market, and Ukraine needs about 3.5 million tons of bread.

“We are not facing any famine. We fully ensure our food security. However, Ukraine is so integrated into the global economy and the global food security system that stopping supplies to global markets will lead to higher inflation even in developed countries. And in developing countries, there may be famine,” explained the President of the Ukrainian Grain Association.

Gorbachev reminded that as of May 15, Ukraine exported 52 million tons of grains and oilseeds. Together with edible oil and meal, this will amount to more than 60 million tons of agricultural products.

Tags: Black Sea grain corridor, Ukraine