Ukraine food exporter forced to barter as war cuts off cash

Astarta Holding NV, one of Ukraine’s biggest agriculture exporters, faces a cash crunch so severe it’s now using barter after Russia’s invasion cut off access to ports and left warehouses and equipment destroyed.

“The flow of cash for supplied products has stopped; even purchased grain was not paid for,” Chief Executive Officer Viktor Ivanchyk said in an interview from Kyiv, where he’s still working at the headquarters of the sugar, grains and milk producer. “There were quite big delays because many multinational traders evacuated their staff and payments stopped.”

That’s forcing the company to be creative. Astarta now supplies fodder and other ingredients to meat processing plants in return for products it can distribute to workers and landowners that lease fields to the grower, Ivanchyk said. It’s also using the same model with the dairy business.

“We temporarily, I hope, switched to barter payments,” he said.

So far, the company has distributed more than 600 tons of food for free to people in need.

Banks aren’t providing enough credit, and international financial institutions need to provide assistance faster so farmers have inputs for spring sowing, Ivanchyk said. Astarta typically plants on 220,000 hectares (544,000 acres), though some of that land is now unreachable or laden with downed jets, missiles and drones, he said.

Ukraine is the second-biggest shipper of grains and biggest exporter of sunflower oil, but the conflict is inflicting heavy damage on growers, their distribution networks and shipping ports. The agriculture sector, considered Europe’s breadbasket, has pivoted from feeding the world to feeding the nation.

The government will provide support, including compensating farmers for interest on borrowed loans and offering six-month loans for sowing during martial law, Agriculture Minister Roman Leshchenko said.

MHP SE, which had a frozen-chicken warehouse destroyed during shelling, has coupon payments due in March, April and May. The conglomerate has liquidity, but “we will look at different options,” executive chairman John Rich said.

The company has been delivering food at cost to the army and free to civilians, and it’s trying to cover expenses through supermarket sales.

“Obviously, we’re making a loss,” he said from Slovenia. “Our aim is to try to get to the break-even point. This is difficult.”

AJOT

Tags: Ukraine, exporter, Astarta Holding NV, cash, credit, shipper