As Ukraine transitions from harvesting wheat and barley to corn, soybeans, and sunflower, farmer Oleksandr Chumak reports strong yields but is unable to sell around 80% of his grain profitably due to storage facilities being overwhelmed and export routes blocked by the war.
The situation is exacerbated by intensified military actions in the Black Sea, making it impossible to insure commercial shipping. Andrii Dykun, chairman of the Ukrainian Agri Council, highlights the financial strain on farmers who cannot cover operating expenses or pay taxes due to the inability to sell crops.
While some farmers are selling at lower prices to maintain liquidity, others are holding onto their stocks, anticipating better market conditions. PrivatBank has increased its lending to agribusinesses significantly, but many producers are revising their planting strategies towards oilseeds and niche crops that are less affected by logistics costs.
The overall agricultural output is expected to rise to 85 million tonnes, but the pressure from carry-over stocks and military threats complicates logistics and storage. The blockade of Black Sea ports is not only affecting Ukraine but also has global implications, as both Ukraine and Russia previously supplied a substantial portion of the world's grains and oilseeds.
The current situation is leading to higher commodity prices outside the region, but a potential reopening of these ports could drastically reduce prices globally, flooding the market with previously trapped supplies. The ongoing conflict and logistical challenges continue to pose significant risks to global food security