As per a senior industry official, Ukraine could potentially lose $6 billion in grain revenues following a blockade by the Russian navy preventing it from selling millions of tons of corn and wheat that it had earmarked for exports by June.
Countries which rely on Ukrainian wheat include Yemen, Egypt, and Turkey; they will now have to find alternative supplies.
Ukraine, a major producer of grain and oilseeds, exports 98% of its cereals through its ports and only a fraction by rail, where costs are higher.
In 2020-2021, Ukraine was the world’s fourth largest grain exporter, with Russia coming at third, as per data from International Grains Council. Russia and Ukraine accounted for 22% of global exports.
According to Ukrainian maritime officials, the conflict has left around 100 foreign-flagged vessels stranded in the country’s ports.
“We are sitting on a potential loss of $6 billion,” said Mykola Gorbachev, chairman of the Ukrainian Grain Association. He went on to add, Ukraine had around 20 million tonnes of wheat and corn to export from the 2021/22 season, which ends in June, at an average price of around $300 per tonne.
There was no way such high volumes could be transported by train, as the railway had a throughput capacity of some 600,000 tonnes per month, a tenth of what ports handled before the war.
In 2021, Ukraine exported nearly $27 billion in agricultural products, which make up around 50% of its total export income.
“Now we are just losing this sector,” said Gorbachev.
Hit by Western sanctions, Russian exports have also been severely limited and its likely to lose its position to the European Union for the 2021/22 season, according to IGC forecasts.
“Ukrainian farmers may also be thinking twice before sowing new crops out of fear for their safety but also because their grains could go unsold if the war continues,” said Gorbachev.
He went on to add, “The new crops of corn and barley have to be planted over the next month or it will be too late”.
“Ukraine has enough grain and food reserves to survive for a year, but if the war continues … (it) will not be able to export grain to the world, and there will be problems”.