Ukraine’s agricultural sector could lose $1.5–3 bln due to port blockade

Ukraine’s agricultural sector could suffer direct losses of $1.5–3 bln this year as Russia’s attacks have effectively blocked the country’s Black Sea grain exports, Agriculture Minister Taras Vysotskyi said in an exclusive interview with Reuters. He described the current situation as exceptionally difficult for the farming sector.

According to Vysotskyi, more than 30 mln tons of grain and oilseeds are at risk of not reaching international markets unless maritime exports resume. Alternative export routes via rail, the Danube and road transport are expected to reach the required capacity no earlier than the end of August and, even then, will handle only 50–55% of the Black Sea ports’ monthly capacity of about 6 mln tons.

The minister stressed that alternative logistics cannot replace seaborne exports. They increase producers’ costs by an additional $45–50 per ton, while domestic grain and oilseed prices have already fallen by an average of 30%. He added that, in some respects, the current situation is even more difficult for farmers than in March–April 2022.

According to Ukraine’s Ministry for Development of Communities and Territories, Russia carried out 35 attacks on vessels in ports, 22 attacks on civilian ships at sea, and 67 strikes on port infrastructure in July alone. As a result, shipowners have suspended calls at Odesa region ports for nearly two weeks, just as the country’s harvest campaign reaches its peak.

Vysotskyi warned that continued disruption of Ukraine’s maritime exports could trigger higher global food prices. Ukraine normally accounts for about 6% of global wheat exports, 11% of global corn exports, and is one of the world’s leading suppliers of oilseeds and vegetable oils. He called on Ukraine’s partners to strengthen security in the Black Sea, stressing that without the restoration of port operations, Ukraine cannot continue to fulfil its role as a guarantor of global food security.

Tags: grain, wheat, restrictions, war, Black Sea grain corridor, Ukraine, corn, export