Shutdown of Odesa ports threatens Ukraine with up to 1.5% GDP loss and grain storage crisis

Russian attacks on Odesa are increasingly disrupting one of Ukraine’s key agricultural export channels. According to the Financial Times, around 15 vessels per day were still calling at Odesa ports in July, but by the end of the month the number had fallen to just one or two. In August, vessel traffic effectively came to a halt, according to Kpler.

The main reason is the sharp increase in shipping risks following intensified attacks on port infrastructure and civilian vessels. According to Dmytro Barinov, head of the Ukrainian Ports Association, even companies able to afford expensive insurance are unwilling to risk their crews. Lloyd’s List has described the Black Sea as one of the world’s most dangerous areas for commercial shipping, with at least 23 seafarers reportedly killed in attacks in July alone.

The disruption of seaborne exports comes at a critical time for Ukraine’s agricultural sector as the new crop enters the market. Despite attacks on farmland, favorable weather conditions are expected to support a good harvest. The main challenge, however, is no longer production but getting the grain to international buyers.

The situation is further complicated by substantial old-crop stocks. Barinov estimates that Ukraine still has at least 10 mln tons of last season’s crops that farmers have not sold and traders have not exported. The arrival of the new crop amid the port shutdown could sharply increase pressure on storage facilities, as Ukraine does not have sufficient capacity to hold such volumes for an extended period.

Ukraine is seeking to expand alternative export routes, including additional rail capacity toward its western borders. However, these routes cannot fully replace Black Sea ports or handle the country’s entire agricultural export potential. “We need the ports,” said Andriy Stavnitser, CEO of TIS, Ukraine’s largest private port operator.

The consequences of a prolonged shutdown could extend far beyond the agricultural sector. According to economists cited by the Financial Times, a complete closure of Ukraine’s Black Sea ports could cost the country around 1–1.5% of GDP. Stavnitser also warned that removing one of the world’s major grain producers from international markets could affect food supplies for hundreds of millions of people.

As a result, a good harvest this year could turn from an advantage into an additional logistics challenge for Ukraine. Without stable access to seaports, the country risks facing rising grain stocks, insufficient storage capacity, pressure on domestic prices and lower foreign-currency revenues from agricultural exports.