Ukraine’s Grain Trade Disrupted: Ports Bombed and Silos Destroyed

Odesa, Ukraine- In the wake of the recent collapse of the Black Sea Grain Initiative, concerns and uncertainties have arisen. This agreement, which had enabled Ukraine’s agricultural produce to be traded globally, has come to an end. Ships destined for African and Asian ports traditionally pass through the Bosphorus Strait in Istanbul, crossing the Black Sea. However, significant issues form delays leading to vessels waiting for inspection and clearance before proceeding. This situation has given rise to disruptions in trade…

Despite this, ships bound for Ukraine no longer benefit from protection, even when in international waters. Dmytro Barinov, Deputy CEO of the Ukrainian Sea Ports Authority, expressed his concerns about the situation. He noted that shortly after the grain initiative was signed on July 22 of the previous year, there was an incident where rockets were fired into the port on the following day. Fortunately, there were no casualties or damages, but this incident indicated a disregard for international agreements.

Ukraine plays a significant role as a global producer of grain, and its Ministry of Agriculture has reported a larger harvest this year compared to the previous year. However, due to the bombings of ports and destruction of grain silos, a considerable amount of grain has been unable to reach its intended markets. The interference of Russia in Black Sea shipments has further complicated the matter.

Despite these challenges, companies are still working to expand their businesses where possible. Viktor Berestenko, associated with Inter Trans Logistics or the Association of International Freight Forwarders of Ukraine, expressed hope that Ukraine’s security services and Navy would respond to the destruction of their ports. He emphasized the interconnectedness of the ports on the Black Sea and the need to protect them.

The conflict has had a significant impact on Ukraine’s grain exports. Normally exporting 60 million tonnes of grain annually, the disruption in exports has affected both traders and farmers’ incomes. The bombing of the river port in Mykolaiv last year has led to alternative methods of transporting grain. With the port severely damaged, grain is now transported by road and rail to reach western Europe.

Before the conflict, the majority of Ukraine’s exports were channeled through its 18 ports. During the grain agreement, trade was limited to just 3 ports. However, even this limited trade has become precarious due to the ongoing conflict. To overcome these challenges, roads and railways have become vital conduits for trade.

Dr. Sergey Yakubovskiy, Head of International Economic Relations at Odesa Mechanikov National University, highlighted the impact on grain traders. The new logistics, involving rail and road transportation, has led to higher costs, impacting the profits of those engaged in grain exports.

While wars are often considered profitable, the conflict has led to substantial job losses and displacement. In Odesa, some beaches have been reopened as people seek solace and distraction from the hardships of the past 18 months.