Ukraine could lose $6 billion in grain exports with ports blocked -Breaking
© Reuters. FILEPHOTO: A tractor loaded with grains and cranes can be seen in Berdyansk (Ukraine), November 30, 2018. REUTERS/Gleb Garanich/File Photo
Silvia Aloisi and Pavel Polityuk
LVIV (Reuters – Ukraine is facing a $6 billion loss in grain revenues due to the Russian blockade at its ports. This prevents Ukraine from exporting millions of tonnes of corn and wheat that were earmarked for sale by June. A senior industry official stated this.
Aid agencies warn that countries which rely on Ukrainian wheat imports – such as Egypt, Turkey, and Yemen – will have to look for alternative sources of supply.
Ukraine is a large producer of oilseeds and grain. It exports 98% through ports, and only a small fraction via rail.
According to data from the International Grains Council, Russia was third and China fourth in terms of grain exports. They combined contributed 22% to global exports.
However, Russian warships off Ukraine’s south coast have prevented cargo ships leaving ports. This has caused grain exports to almost stop since February 24, when the conflict began.
According to Ukrainian maritime officials, fighting has left 100 foreign-flagged ships stranded in Ukrainian ports.
Mykola Gourbachev of the Ukrainian Grain Association stated that “we are looking at a possible loss of $6 billion.”
The country has around 20,000,000 tonnes of wheat and corn left to export after the 2021/22 seasons, which finishes in June. They are selling at an average of about $300 per tonne.
According to him, Ukraine couldn’t transport such a volume of cargo by rail, since the railway could handle 600,000 tonnes per months, which is tenth the amount of ports that handled prior wars.
Ukraine has exported agricultural products valued at $27 billion
In 2021, this will make up approximately half its export earnings.
Gorbachev stated, “Now we’re just losing that sector.”
On Friday, the World Food Programme stated that Ukraine was experiencing a collapse in its food supply chains. Its infrastructure including bridges and train tracks had been destroyed by bombs. There were also empty grocery stores.
Russia has faced sanctions from the West and has placed export bans on its wheat imports. But, IGC forecasts show that Russia may be losing the title to the European Union as the largest global exporter of wheat for the current season in 2021/22.
After the global supply chain issues resulting from the COVID-19 pandemic, further fuel will be added to food insecurity already high.
According to the United Nations Food Agency, world food prices rose 20.7% in February.
The war may not cause food shortages for those Ukrainians not in the eastern besieged cities of Mariupol or Kharkiv.
Gorbachev stated that Ukrainian farmers might be thinking twice about sowing new croppings, not only out of concern for their safety, but also because they could lose their crops if war continues.
Ukrainian farmers, who have produced an unprecedented grain crop in the last year’s harvest, claim they lack fertilizer and fuel for their dormant winter wheat plants.
Gorbachev stated that the corn and barley crops must be planted in the coming month, or else it’ll be too late.
Oleh Ustenko was the president’s adviser and stated at the weekend that Ukraine could not export enough crops if it is disrupted by the invasion.
He stated that Ukraine has sufficient food and grain reserves to last a year. However, if war continues, “it” will no longer be able export grain to the rest of the world.
Reuters has learned that while spring grain has been sown in some parts of the country, no major sowing campaigns have yet begun. Taras Vysotskiy was deputy minister to agriculture.