Ukraine’s grain exports are once again under serious pressure. During the first five days of August, rail shipments of grain to the ports of the Greater Odesa region—Odesa, Chornomorsk, and Pivdennyi—declined by 84.3% compared to the same period in July.
Amid Russian attacks on port infrastructure and disruptions in maritime logistics, Ukrainian exporters are forced to reroute some of their cargo to Danube ports, the western border, and other routes.
But can these alternative routes compensate for the losses from the Black Sea route? What is happening with the new harvest’s grain, how is the situation affecting prices and farmers’ incomes, and could the decline in Ukrainian exports impact the global food market? Maksym Hopka, an analyst at the Ukrainian Agribusiness Club (UKAB) Association, explains the situation.
In brief:
- Exports through the ports of Greater Odesa have virtually come to a standstill: in the first five days of August, rail shipments of grain to the ports fell by 84.3%. Formally, the maritime corridor continues to operate, but due to attacks on port infrastructure and civilian vessels, shipowners are avoiding entering the Black Sea.
- Alternative routes cannot fully replace the Black Sea. The capacity of rail, road transport, and the Danube ports is currently estimated at approximately 2.5 million metric tons per month, whereas Ukraine traditionally exported more than 4.5 million metric tons per month by sea.
- Grain is piling up within the country, and farmers are forced to seek additional storage options for the new harvest. The problem may be particularly acute with corn, which requires drying and significant storage space.
- The logistics crisis has already caused a sharp drop in grain purchase prices in Ukraine. From mid-July to early August, the price of bread wheat in central Ukraine fell by nearly 31%, barley by 27%, and corn by 15%. For some farmers, selling their harvest is becoming economically unprofitable.
- The ongoing export problem threatens the agricultural sector with a shortage of working capital. According to an analyst at the Ukrainian Agribusiness Club (UKAB) estimates, if the logistics crisis continues through August–October, lost or delayed foreign currency inflows could amount to as much as $2.8 billion.
- The expert considers the best-case scenario to be the restoration of maritime shipping safety combined with the full-scale operation of the Danube route.
During the first five days of August, rail shipments of grain to the ports of Greater Odesa fell by 84.3%. How critical is this figure for Ukrainian agricultural exports?
This figure is extremely critical, as historically, maritime routes have accounted for about 94% of Ukrainian agricultural exports, shipping 4.1–5.0 million metric tons of produce each month. Such a sharp decline creates a shortfall in export capacity of 2.2–2.5 million metric tons of grain per month, which cannot be immediately redirected via alternative land or river routes. In monetary terms, this leads to delayed or lost foreign exchange earnings.
According to forecasts, if the logistical shock persists through August–October, the total amount of lost revenue could reach between 1.9 and 2.5 billion dollars.
What exactly was the main cause of such a sharp decline? Is it a consequence of Russian attacks on port infrastructure, operational problems at the ports, the suspension of shipping, or a combination of several factors?
The main cause of the decline was a combination of factors, primarily regular missile and drone attacks on the infrastructure of the Greater Odesa region and direct strikes on civilian merchant ships. Due to the damage to several ships and the loss of life, shipowners began to refuse en masse to enter the Black Sea for safety reasons.
Can we say that a significant portion of Ukraine’s maritime exports has effectively been blocked? Or are the ports still operating, albeit at a significantly slower pace?
Due to targeted attacks on port infrastructure and civilian vessels, exports via the Ukrainian corridor have virtually ceased.
We can say that a significant portion of Ukraine’s maritime exports has effectively been blocked, although formally, the ports of Greater Odesa and the maritime corridor continue to operate. Due to targeted attacks on port infrastructure and civilian vessels, exports via the Ukrainian corridor have virtually ceased. Because of security risks, shipowners are refusing to enter Black Sea waters; new vessels are not arriving, and only those that entered earlier and were waiting to be loaded are leaving the area
Some of the cargo is now being rerouted to Danube ports and the western border. Are these routes capable of compensating for the losses of Greater Odesa?
No, alternative routes are physically incapable of fully replacing and compensating for the losses resulting from the blockade of the Greater Odesa ports. Currently, the railroad is capable of transporting approximately 250,000 metric tons per month, with a potential capacity of up to 1 million metric tons of grain per month; however, using road transport on such a scale is impossible due to the extremely high cost. The all-time high for exports via alternative routes was 3.7 million metric tons in August 2023, but it is extremely difficult to repeat that figure now.
The main obstacle to compensating for exports via the Danube is the record-low water level, which has reached its most critical point in the last 30 years.
The main obstacle to compensating for exports via the Danube is the record-low water level, which has reached its most critical point in the last 30 years. Due to the shallowing waters, barges lose between 30% and 60% of their carrying capacity, and vessels are loaded to only 20–30% of capacity, which significantly increases voyage times and creates backlogs. Taking into account the limitations of the Danube and border capacity, the potential of alternative routes is currently estimated at only 2.5 million metric tons per month, which cannot meet the demand for over 4.5 million metric tons of monthly maritime exports.
What is happening to the grain that has already been prepared for export? Is it piling up in grain elevators and on the railways?
Due to the prolonged harvest and the inability to export the necessary volumes, grain is accumulating en masse in the domestic market, which is putting significant pressure on purchase prices for farmers. Currently, producers are forced to temporarily store their crops: medium and large enterprises are filling their own grain elevators and storage facilities, while small farmers are packing grain into special plastic bags where it can be stored over the winter.
Ukraine is now entering the peak harvest season. Could a shortage of export capacity create a problem for receiving the new harvest?
Yes, due to the active harvest and the inability to export fully, a significant volume of produce is accumulating in the domestic market. Farmers urgently need to free up storage capacity to receive the new harvest. Ukraine has approximately 55 million metric tons of storage capacity available, and small farmers can temporarily store their produce in grain silos; however, the long-term closure of ports is creating serious strain. This could become the biggest problem for corn, which has the largest volume, requires pre-drying, and needs significant storage space.
To what extent could this affect domestic grain purchase prices in Ukraine? Could farmers find themselves in a situation where it becomes unprofitable to sell their harvest?
The logistics crisis has already led to a sharp drop in domestic purchase prices, making it economically unprofitable for farmers to sell their harvested crops. For example, from mid-July to early August, the price of food wheat in central Ukraine fell by nearly 31%, barley by 27%, and corn by 15%. For many producers, this means operating at the break-even point or even below cost. Specifically, for barley, the price difference compared to production costs currently results in a loss of over $40 per metric ton.
Could this situation lead to a rise in the price of Ukrainian grain on the global market due to higher logistics costs along alternative routes?
A reduction in the overall supply of Ukrainian grain on the global market could intensify competition among buyers and provide additional support for rising global prices.
Rerouting exports to alternative routes (rail, Danube ports) does indeed significantly increase logistics costs—avoiding the ports of Odesa adds about $51–58 in costs per metric ton. A reduction in the overall supply of Ukrainian grain on the global market could intensify competition among buyers and provide additional support for rising global prices. For example, the European feed grain market is already seeing rising prices for wheat, barley, and corn due to fears of a shortage of Ukrainian supplies. But this does not offset farmers’ costs.
Which crops are currently suffering the most from logistics problems—wheat, corn, barley, or sunflowers?
Crops with relatively low prices are suffering the most from logistics problems (primarily wheat and barley, while corn will begin to feel the impact once the new harvest begins), as expensive alternative logistics completely “eat into” the producer’s margin.
Specifically, barley exports through European ports are already resulting in an estimated loss of $24–25 per metric ton, while for corn, the loss via Constanta, Romania, could amount to about $14 (based on the price of the old crop). In addition, corn is the most vulnerable in terms of logistics due to its significant gross volume, which requires prompt handling and large grain elevators for storage
If the situation with the ports continues for several more weeks or months, what could be the economic consequences for the Ukrainian agricultural sector?
A prolonged blockade of the ports threatens to cause a large-scale liquidity crisis and a shortage of working capital for farmers, who need funds to cover loans, pay rent and salaries, and carry out the fall planting season. The shortage of export capacity could result in a monthly loss or delay of foreign exchange earnings amounting to $450–500 million. If the crisis drags on for three months (August–October), the total amount of lost revenue in the sector could reach between $1.9 billion and $2.8 billion.
Ukraine remains one of the major suppliers of grain to the global market. Could disruptions to Ukrainian exports affect global food prices?
…the global market may temporarily face a shortfall of about 9 million metric tons of Ukrainian agricultural products, which would mean a significant reduction in supply in the Black Sea region.
Yes, because the global market may temporarily face a shortfall of about 9 million metric tons of Ukrainian agricultural products, which would mean a significant reduction in supply in the Black Sea region. Such a shortage will force importing countries to actively seek other sources of supply, intensifying competition for available grain. Consequently, this creates additional pressure and momentum for rising global food prices, which is already being felt directly, for example, in the EU’s livestock sector.
Who could become Ukraine’s main competitor in global markets if Ukrainian grain is temporarily exported in smaller volumes?
In the wheat market, the main competitors capable of quickly taking over contracts (for example, in Egypt) are Russia, Romania, Bulgaria, France, and the United States. Turkey can quickly replace Ukrainian corn with purchases from producers in the United States, Brazil, or Argentina.
In the European market, Ukraine will also compete with EU producers (Romania, Bulgaria, and France), while in the vegetable oil market, suppliers of cheaper soybean and palm oils from Argentina, Brazil, Indonesia, and Malaysia are becoming the main alternatives.
Is there a risk that importers will begin entering into long-term contracts with other countries, fearing instability in Ukrainian supplies?
Ukraine will not lose its markets globally. Historical experience shows that once stable export volumes were restored, Ukraine successfully returned to its traditional markets, often even increasing its market share.
Although importers are forced to temporarily adjust their procurement strategies (for example, Indian companies switching to Argentine sunflower oil or Australian canola oil), Ukraine will not lose its markets globally. Historical experience shows that once stable export volumes were restored, Ukraine successfully returned to its traditional markets, often even increasing its market share. Geographical proximity and the short logistics route across the Black Sea remain powerful competitive advantages that ensure sustained demand for Ukrainian products.
If nothing fundamentally changes and the situation with the ports remains unstable until fall, what do you see as the way out? What would be the best-case scenario for the Ukrainian agricultural sector, and what would be the worst-case scenario?
A systemic solution must involve the development of sustainable alternative infrastructure (dry ports, long-term transit agreements with neighboring countries), as well as a strategic reorientation of the sector from raw material exports toward deep agricultural processing, including the production of biomethane and bioethanol.
The best option would be the military and diplomatic restoration of maritime shipping security, combined with the full-scale operation of the Danube (which is forecast to reach full water levels in October–November), which would allow for the rapid export of stockpiles, restore profitability, and provide producers with the necessary liquidity.
The riskiest scenario would arise if, in addition to the blockade of Greater Odesa, it becomes impossible to use the Danube ports (due to attacks or further silting), causing the entire export burden to fall exclusively on rail and road transport. In that case, export capacity will be limited to the historical overland maximum of 1.84 million metric tons per month, which will trigger a large-scale crisis as early as mid-October—farmers will lack the financial resources to pay rent, wages, and cover the costs of the fall planting season.
Author: Svitlana Mialyk
