Ukraine's Farmers Look to New Black Sea Route to Boost Food Exports

October 23, 2023

© Richard Cff / Adobe Stock
© Richard Cff / Adobe Stock

Agricultural producers in Ukraine say a new Black Sea corridor could enable exports of up to 2.5 million metric tons of food a month, almost offsetting the impact of Russia's decision to quit a U.N.-brokered deal to allow grain shipments through the region.

The export deal brokered by the United Nations and Turkey collapsed in July as Russia declined to recognize it, saying its demand that sanctions be lifted on its grain and fertilizer exports had not been met.

Kyiv has since opened what it says is a temporary humanitarian corridor in a bid to break Russia's de facto blockade. Ukraine's shipping sources said more than 40 cargo vessels have entered the corridor so far.

The Black Sea export routes are still not fully operational and the current export figures are lower than last year, said Denys Marchuk, deputy head of the Agrarian Council, Ukraine's largest agribusiness group.

"But this is not critical as we are developing an alternative route and the last month has shown that we can export by the Black Sea without Russia's participation," Marchuk told the national television on Sunday.

"I hope that exports by the new corridor will amount to 2-2.5 million tons (per month), and then together with other routes grain exports may reach 5-5.5 million tons a month," he said.

During the former corridor's operation, Ukraine exported up to 3 million tons of food and, together with alternative routes, exports were up to 6 million tons per month.

Ukraine exports food also via small river ports on the Danube River and using its land border with the Eastern European countries. It is one of the leading global producers and exporters of food and its agrarian sector has been traditionally profitable.

But its grain and oilseeds crop sector losses could exceed $3.2 billion in 2023 due to the high cost of logistics as well as fuel and fertilizer price hikes, farmers unions said last week.

Agriculture ministry data shows Ukrainian grain exports were down 29.7% to 8.3 million metric tons so far in the 2023/24 July-June season.

Ukraine is expected to harvest 79 million tons of grain and oilseed in 2023, with 2023/24 exportable volumes of about 50 million tons.


(Reuters - Reporting by Pavel Polityuk)

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