Ukraine could partially offset the loss of deep-water exports through alternative logistics

The intensification of Russian attacks on Ukraine’s port infrastructure and civilian vessels in the Black Sea has forced some international traders to temporarily suspend grain purchases through Ukraine’s deep-water ports. This has led to a sharp decline in domestic grain prices in Ukraine while simultaneously driving European futures higher amid concerns over reduced grain supplies from the Black Sea region.

On July 14–15, Russian drones struck at least three foreign-flagged civilian vessels that were entering or waiting to load cargo at the ports of Greater Odesa. The attacks killed the captain of one vessel and injured several crew members. Following the strikes, some shipowners refused to call at Ukrainian ports, while a number of international trading companies suspended grain intake or temporarily limited purchases until the security situation improves.

As a result, domestic procurement prices fell sharply. In a single day, prices for wheat, barley, and rapeseed at Ukrainian ports declined by UAH 200–500 per metric ton, while domestic prices for rapeseed and sunflower seed dropped by as much as UAH 1,000 per metric ton due to the heavy reliance of vegetable oil and meal exports on seaborne logistics. Meanwhile, Euronext futures in Paris rose sharply, with September wheat gaining 6.9%, August corn up 2.2%, and August rapeseed increasing 3.5%.

Analysts believe that part of the reduced exports from Ukraine and Russia could be replaced by shipments from Romania and Bulgaria. However, these countries will not be able to fully compensate for the loss of Ukraine’s deep-water exports, meaning that global grain markets will remain highly sensitive to developments in the Black Sea.

At the same time, Ukraine’s export sector has opportunities to adapt to the new conditions. In particular, traders are actively returning to export routes developed in 2022–2023 through Romanian ports and the country’s western border, where the necessary infrastructure has already been upgraded. Although these routes cannot fully replace deep-water ports, they can partially offset the loss of maritime logistics, support Ukrainian agricultural exports, and reduce pressure on the domestic market.

Tags: Ukraine, export, grain, Ukrainian ports, war