Ukraine faces a potential loss of $6 billion (€5,4 billion) in grain revenue as the blockade of its ports by Russian forces prevents it from selling millions of tons of wheat and corn that were destined for export through June, a senior industry official told Reuters.
Countries that depend on imports of Ukrainian wheat – including Egypt, Turkey and Yemen – will have to find alternative supplies.
One of the world's leading producers of cereals and oilseeds, Ukraine exports 98% of its grain through its ports and only a fraction by rail, where costs are higher. The country was the world's fourth-largest grain exporter in the 2020/21 season, while Russia came in third, according to data from the International Grains Council. Together, the two countries accounted for 22% of global exports.
Port blockade
With Russian warships off the southern coast of Ukraine preventing cargo ships from leaving ports, including Odessa, a major Black Sea port, grain exports have been at a standstill since the start of the war on February 24.
Ukrainian maritime authorities said the fighting has left about 100 foreign-flagged vessels stranded in the country's ports. " We are facing a potential loss of six billion dollars ," Mykola Gorbachev, president of the Ukrainian Grain Association, told Reuters, adding that the country had about 20 million tons of wheat and corn still to export, at an average price of about $300 per ton.
According to the official, there is no way for Ukraine to transport this type of volume by train, since the railway has a limited capacity of 600 tons per month, a tenth of what the ports managed before the war. In 2021, Ukraine exported approximately $27 billion (€24,5 billion) in agricultural products.
Food inflation
Russia, which has been hit by Western sanctions and imposed export restrictions, was the world's largest wheat exporter in 2020/21, but could lose that status to the European Union in the current season, according to forecasts from the International Grains Council.
The Ukrainian crisis will add more fuel to food inflation. The United Nations food agency, FAO, reported this month that global food prices hit a record high in February, registering a year-on-year increase of 20,7%.
