The Real Impact of Russia has been Blocking the Black Sea and now Ukraine’s Grain Exports have Dropped 30%
Impact Exports of grain, oilseeds, and Ukrainian food have fallen sharply. This was after Russia terminated the agreement. Allowing exports from Ukraine to the Black Sea or the Black Sea Grain Initiative. Quoting Reuters. Analysts said Ukraine was only able to export 32 million tons of grain. Vegetable oil and food in the last four weeks to August 15 2023. This figure decreased from 44 and 48 million tons or 30%. In May and June when the Black Sea agreement was still in force.
the start of the Russian invasion
The United States (US) is reported to have worked with partners in Europe to keep grain exports going. Relying on rivers such as the Danube and other roads after sea lanes became unsafe. However increasing volume through these routes has proved difficult. Ukrainian President Volodymyr Zelensky said that within a month of the grain deal stalling. There had been seven attacks on ports with drones and missiles. Signaling how difficult it would be to find a reliable solution. Meanwhile Ukrainian Agribusiness Club board member Alex Lissitsa said there were also logistical. Constraints so it would take some cargos four times as long to get to the Danube now compared to a month ago due to traffic jams. Delays and smaller volumes of shipments also lead to higher transportation costs. Operations director at supplier Agrotrade Group Olena Vorona said her company actually changed the direction of flow to Danube ports and the rail line even before the grain deal collapsed, but transportation costs rose by up to 50 percent. “In many areas, farmers are likely to think about sowing less winter cereals, because the prices offered by the market do not cover the costs,” says Lissitsa.
Meanwhile, Ukrainian rail operators say that the waiting time at border crossings to European countries is currently around 5-6 days. Its chairman, Yevhen Lyashchenko, told Bloomberg that it was preparing to increase rail exports. That may not be enough to prevent a wider slowdown. “That will reduce Ukraine’s gross domestic product (GDP) by up to 3 percent in the second half of this year,” he said. Russia’s own grain trade benefited from Ukraine’s weakness. Its crop exports are booming, and are expected to account for nearly a quarter of global wheat trade in the 2023-2024 season.
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