Ukrainian producers and exporters should not count on deep-water ports resuming operations any time soon and must focus on available alternatives instead, the analytical department of the country's largest farmers' union UAC said on Tuesday.In recent months, Russia has sharply increased both the number and intensity of its drone strikes on Black Sea port infrastructure in the Odesa region, effectively blocking a route that used to handle 90% of Ukraine's exports.
That forced Ukraine to divert cargoes through Danube river ports and by rail to the western border.
However, transportation via alternative routes costs up to $50 per ton more than using deep-water ports, while their capacity is substantially lower.
According to the agriculture ministry's estimates, Kyiv can export only about half of the required volume through Danube ports and by rail.
"Forget about deep-water ports operating at least until December or January. Build your trading strategy for the current — and possibly the next season, on the assumption that deep-water ports will remain closed," UAC said in a weekly report."If you are prepared for these difficult challenges, you will be able to get through them. Companies should prepare for the worst-case scenarios."Ukraine is among the global major producers and exporters of grains, oilseeds and vegetable oil and its agricultural exports, which brought $22 billion last year, are a source of critical revenue for the state budget, stretched by the war.Ukrainian food exports have already declined and could fall to about 1.7 million tons in August against at least 4 million tons of food a month before the seaports blockade.The agriculture ministry data showed that grain exports had fallen to 774,000 metric tons in August, a third of year-ago levels.The expected decline in exports and resulting lower farmers' incomes will probably lead to a reduction in plantings, particularly of winter wheat, for the 2027 harvest, the ministry said.Winter wheat is sown in the autumn and harvested in the following summer. Ukraine harvested 24.7 million tons of wheat from 98% o the sowing area as of September 1.
(Reuters)
