Home / Shipping News / International Shipping News / Ukraine grain deal won’t fix warzone logistics, top producer says

Ukraine grain deal won’t fix warzone logistics, top producer says

A deal to restart exports of Ukrainian grain through its deep sea ports could be a game changer, the chairman of Ukraine’s top food producer MHP said, but he warned that getting produce to export terminals still presents major challenges.

The war in Ukraine has caused a surge in global prices for grains, cooking oils, fuel and fertilizer, with Russia’s blockade of sea ports leaving dozens of ships stranded and some 20 million tonnes of grain stuck in silos at Odessa.

Russia, Ukraine, Turkey and the United Nations are due to sign a deal next week aimed at resuming Ukraine’s Black Sea grain exports, following talks in Istanbul.

While the potential agreement was positive, execution will be challenging, with ports needing to be de-mined and infrastructure damaged in Mykolaiv and Odessa, MHP chairman John Rich told Reuters in an interview.

“We still have to ship the grain to the ports, and infrastructure is difficult, we still have to do so under fire – Mykolaiv and Odessa have been hit by missiles in the past 72 hours,” Rich said.

“I think we (can expect) a fair bit of time and water under the bridge before we can have confidence this is going to solve the problem in the short-term. Medium-term maybe it can relieve things, but I think we have (to play a) waiting game.”

Ukraine and Russia are major global wheat suppliers, and Russia is also a large fertilizer exporter. Ukraine is a significant producer of corn and sunflower oil.

Speaking about Ukrainian grain, Rich said he expected the country to produce more than originally anticipated. The winter harvest is expected to bring in 30 million tonnes, two-thirds wheat and the rest rapeseed and barley.

Summer grains production could be around 38 million tonnes.

“The plus is that we are growing the grains, but I can’t get it out of the country in our own operations, let alone Ukraine generally,” said Rich.

Grain exports must move soon and free up brimming storage facilities to enable planning for the next season’s crop, Rich said.

“If Odessa does not open, do we plant in September? That decision has to be made.”
Source: Reuters (Reporting by Karin Strohecker, Sujata Rao and Nigel Hunt in London; Editing by Frank Jack Daniel)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping