Gus Trompiz, Bozorgmehr Sharafedin

PARIS/LONDON (Reuters) – After making it through the spring planting season, sometimes with the help of bulletproof vests and helmets, Ukraine’s farmers are facing another challenge – finding enough diesel for the harvest to come.

According to fuel distributors, analysts and farmers, the war with Russia has cut fuel supplies at the same time that farmers were preparing for spring. They have now lost approximately 85% of the normal fuel supply since February 24, when the conflict began.

Because of fighting, this year’s crop area could shrink by up to 30%. And yields could fall if fuel is not available to farmers so that they can use chemicals and harvest crops on the correct time.

Last season, Ukraine was fourth in the world for grain exports. It shipped staples like wheat and maize to Africa, the Middle East and supplied half of the U.N. World Food Programme grain needed for humanitarian aid.

The Black Sea port blockade in Ukraine is making it difficult for crops to escape. U.N. Secretary General Antonio Guterres is trying to negotiate a solution to allow grain shipment to resume and to calm the world’s food markets.

Ukraine was able to export 45 million tonnes in 2021. It was anticipated that it would increase this to 65,000,000 after the record-breaking harvest of late last year. But, 21 million tonnes have been left in silos on territories controlled by the country as the 2021/22 season closes next month.

Security has been the biggest concern of farmers thus far. With large areas of land being cut by Russian advances and shelling damaged, fuel scarcity is starting to become a serious problem.

Kees Huizinga (a Dutch national, who owns a 15,000-hectare crop and dairy farm in central Ukraine) said that fuel is the greatest problem currently.

SOME SHORTAGES

Ukrainian farmers use the bulk of the 1.5million tonnes of diesel that they consume each year. That’s more than 10% off Ukraine’s annual fuel need. Taras Pantasiuk is the commercial director for WOG, a petrol station operator.

Ukraine relies heavily on Russia, Belarus and other imports arriving by sea to supply most of its fuel. According to A-95, Ukraine’s oil products consultancy, over 60% of the country’s diesel was imported from Russia and Belarus last year.

The Ukrainian Oil and Gas Association stated that Ukraine is now forced to take on complex and costly ways of importing fuel from neighboring countries like Poland and Romania via land. However, a lack in capacity and bureaucracy has hindered these efforts.

This task is now more difficult as neighboring countries are experiencing diesel shortages. Meanwhile, Russian strikes against the Kremenchuk oil refinery & fuel depots has further reduced supplies in Ukraine.

An analysis says that fuel supplies are also being affected by the shortage of truck drivers, as many people have been recruited to fight.

Roman Gorobets is the director of FE Astra which has approximately 2,000 hectares of agricultural land in central Poltava. He said that waiting times for diesel delivery to farms are now between two and four weeks.

Things have gotten worse. “We are faced with severe fuel shortages across the country,” he stated.

To cover May’s budget, the government announced that it will import 300,000 tonnes diesel and 120,000 tons of petrol. Kyrylo Tymoshenko (deputy chief of staff for Ukraine’s presidency) stated on Friday that 1,500 tonnes had been cleared through customs in Lviv within the past 24 hours.

Farmers say they have used stocks as well as alternative supply channels to cover their fuel costs, just like with key materials like fertiliser or seed.

CROP SHIFT

Farms also have adjusted their crop plans. They have moved away from corn because it can be very intensive and produce huge harvests which could overburden Ukraine’s grain silos.

They are choosing to plant more barley, soybeans, and sunflower seeds, as they are less expensive and produce smaller quantities once they have been harvested.

Based on last year’s harvest stocks and the current monthly land route exports of between 1 and 1.5 million tonnes, only about 65% will remain in storage when winter crops begin to take place.

Gorobets was one such grower, who completed spring plantings in May and said that not being able sell the next crop is the greatest threat to Ukrainian agriculture.

The conflict could cause a delay in the harvesting season due to a lack of diesel.

It’s a once-in-a-lifetime thing if you have access to seed, fertilizer, or any other chemical. Matt Ammermann is a StoneX commodity risk manager who covers Eastern Europe. Fuel is easier to get, and you require it more often.”

Huizinga claims that his crop and dairy farm in central Ukraine is able to provide enough fuel for the final planting phase, but it will not be sufficient to support harvesting which will begin within a few months.

Similar to other war-time variables, fuel shortages can have a significant impact on crop production. However, forecasts by the Ukrainian government of harvest volumes are not available.

Some analysts expect that wheat production will drop by 35-40% after a record 32 million-tonne crop in 2021. This is despite it being sown mainly before war.

Even with this magnitude decline, it would still mean that about 20,000,000 tonnes of timber will need to be transported and threshed starting in July.

Mike Lee from Green Square Agro Consulting is a specialist in crop analysis and management in the Black Sea area. Timing is crucial for agriculture.

No matter how many fertiliser or seed you have, if diesel is not available, a tractor can’t be driven.