Russian attacks cause 75% drop in grain exports from Ukraine

13 August, 18:47

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Ukrainian grain exports have fallen by 75% in the first two weeks of August compared to the same period last year. Russian strikes have nearly halted shipments through Black Sea ports at the height of the harvest season.

Source: Reuters

Details: Russia attacked Ukrainian port infrastructure more than 70 times in July and early August and struck vessels 62 times, as the Sea Ports Administration reported. Around 90% of Ukraine's wheat, maize and sunflower seed exports pass through the Black Sea.

Meanwhile, grain storage facilities are filling up with the new harvest. Ukraine expects to harvest around 60 million tonnes of grain, and the shortfall in storage capacity could reach 11 million tonnes.

Farmer Serhii Rybalko told Reuters that his grain storage facility is already nearly full, even though the maize harvest will begin next month. There are no buyers for the grain. "Everything has just stopped. Finances have ground to a halt. Revenue streams have dried up. There are no exports," he said.

The accumulation of grain has caused domestic prices in Ukraine to fall significantly, even though Chicago quotations reached a more than one-year high in July. According to analysts' estimates, farmers will only be able to turn a profit from wheat exports, while sales of other grains will not cover production costs.

Without export revenue, farms will lack funds for fuel, wages and autumn sowing. Rybalko needs to earn around UAH 20 million (approx. US$447,000) per month during the harvest to service loans and cover ongoing operations.

Alternative export options are constrained by low water levels on the Danube, Russian strikes on the railway network and stricter trade terms with the EU. Shipments through Poland are also complicated by resistance from local farmers to Ukrainian grain.

Background:

In July, Russian attacks caused Ukraine to lose a third of its Black Sea grain export capacity. Port capacity fell from six million to four million tonnes per month, and four of 13 major grain terminals suspended purchases.
On 6 August, the government expanded the "5-7-9%" programme for farmers, enabling them to access preferential loans for working capital. The total available financing amounts to up to UAH 80 billion (approx. US$1.7 billion).
On 11 August, Moldova granted Ukraine a 50% discount on rail freight transit. The preferential regime will remain in effect until the end of 2026.

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