There is good news for Ukrainian agriculture: On Friday, three more ships with agricultural exports from Ukraine set off to supply the world market via the Bosphorus.
Despite all concerns, the agreement that Turkey and the UN have signed with Russia and Ukraine seems to be holding up: the Black Sea is navigable again.
This is a further building block in dispelling the great fears from the first phase of the war. At the time, observers feared a wave of hunger across the globe if Ukraine were to fail completely as an exporter. But it didn’t come to that. There are mutliple reasons for this.
Even without the sea freighters, the country has found other export routes. Around 40 percent of the previous year’s volumes have already flowed off via the railways and the Danube. This applies to the harvest that was already stored in the silos at the beginning of the war.
According to the Ukrainian industry service “AKP Inform”, 1.4 million tons of grain were delivered from Ukraine to foreign markets in July – that is 43 percent less than in the previous year, but 22 percent more than in the previous month.
However, low water levels on the Danube are currently hampering exports: the barges cannot be fully loaded: instead of 1500 tons, they currently only hold 1000 tons. But with rainfall, the problem will be solved.
The fear that Ukrainian agriculture could come to a complete standstill as a result of the Russian attack has also been largely dispelled.
Thanks to the rapid stabilization of the front after the beginning of the war, the country was able to ensure that the fields outside the direct combat area continued to be cultivated – also because of exemptions from conscription. In addition, the US government supports farmers with 100 million dollars for harvest aid.
Farmers are even reporting particularly favorable weather conditions this year. It is fitting that Russia, as an important agricultural exporter, is also expecting a record harvest.
The Ukraine has apparently also solved a third problem: although the silos are still full due to the reduced export volumes, it organizes storage areas for the new harvest. This eliminates the worry that grain could rot in the fields because there is no storage space.
The Europeans and the USA are supporting the country in procuring mobile silos. This involves, for example, polyethylene sacks in which 200 tons of grain can be stored for more than a year.
It is highly controversial that Russia is transporting grain from the occupied territories. According to reports, the occupiers only pay low prices to local farmers and their cooperatives for this.
However, this also increases exports from Ukraine – especially since the reconquest of the occupied territories is not foreseeable. The EU has also officially made it clear once again that its sanctions should not impede the export and payment of food from the Russian Federation to third countries.
All of this is already significantly lowering global agricultural commodity prices, which had been pushed up significantly by speculators after the start of the war. According to “Raiffeisen”, the price of wheat per ton is around 100 euros below the high for the year at 340 euros. The futures also show that the market expects prices to continue falling.
According to the “Lebensmittel Zeitung”, the procurement prices for sunflower oil, which often comes from the Ukraine, have already normalized.
In the supermarkets, however, this is not yet the case: the retail chains are apparently trying to continue to get rid of expensive goods at the higher prices. According to the industry journal, oil from unknown imported brands still costs just under four euros per standard bottle in stores, compared to just 1.40 euros before the crisis.
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