Farmers warn of risks from prolonged blockade of Ukrainian seaports

A prolonged blockade of Ukrainian seaports could leave the market awash with agricultural produce throughout the marketing year and purchase prices are already falling below the full cost of production.

Source: Ukrainian Agri Council (UAC)

Details: According to estimates by the UAC, production of the main grain and oilseed crops in the 2026/2027 marketing year will amount to around 81.4 million tonnes, and, taking carryover stocks into account, the total volume of produce available for consumption and export will reach approximately 85 million tonnes.

Ukraine needs to export around 67 million tonnes of agricultural produce. However, if the seaports remain closed, export capacity could shrink to 1.7 million tonnes a month, which could create a surplus of produce on the domestic market.

Quote: "A prolonged blockade of the seaports risks creating an enormous commodity surplus: between 27.4 and 32.4 million tonnes of excess agricultural production will continue to put pressure on the market throughout the marketing year."

Details: According to the UAC, purchase prices have already begun falling sharply due to traders halting purchases. In some cases, they have dropped to UAH 7,000 (US$155) per tonne, which is below the full cost of production.

The UAC has called on Prime Minister Serhii Koretskyi to urgently implement anti-crisis measures in response to the halt in vessel calls at Ukraine's Black Sea ports.

The combination of problems with maritime logistics, damaged port infrastructure, export restrictions and rising resource costs creates a risk of unprofitable production, business bankruptcies and disruption to the production cycle, the UAC stresses.

"The agricultural sector is rapidly heading towards a crisis of unprofitable production, which will have a negative multiplier effect on the entire economy," the UAC said in its appeal.

To prevent a large-scale economic and banking crisis, farmers are calling on the government to introduce an anti-crisis package of measures.

Proposals include preferential lending to replenish working capital ahead of the autumn sowing season, restructuring of existing agricultural loans, state guarantees on loans, and a review of certain terms of the 5-7-9% lending programme.

Background:

• As of 23 July, inbound vessel traffic to Ukraine's Black Sea ports has been suspended due to the threat of Russian attacks. This followed weeks of air attacks on Ukraine's Black Sea ports.
• Maersk has suspended its services at the port of Chornomorsk due to intensified Russian strikes on port infrastructure.

• Due to Russian pressure on Ukraine's maritime corridor, Ukrainian traders have begun redirecting some of their wheat and other cargo towards the Danube, although most exporters are not prepared to compensate for the loss of the sea route at any cost and are taking a wait-and-see approach.

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