The Kremlin’s efforts to paralyze Ukrainian food shipments are succeeding, with a third of the country’s crop exports wiped out since its Black Sea ports were effectively blocked last month.
The drop marks a significant setback for Ukraine’s economy and global food security, even with a €1-billion push by the European Union to build out alternative routes since the start of Russia’s invasion. The US this week said it’s working with European partners to keep grain exports flowing, relying on rivers like the Danube and other avenues after sea passage has become unsafe.
“The key question is the river ports,” said Evghenia Sleptsova, senior economist at Oxford Economics. But ramping up volumes through those could prove difficult “now Russia started bombing Izmail and Reni,” two ports along the Danube which were attacked earlier this week.
Ukraine was only able to export 3.2 million tons of grains, vegetable oils and meals in the four weeks through August 15, down from 4.4 and 4.8 million tons in May and June when the Black Sea deal was still in place, according to estimates from analyst UkrAgroConsult. Crop stockpiles are now expected to swell through next year as better-than-expected harvests face fewer routes to market.
Even in wartime, Ukraine is still an important grain exporter globally, and the Black Sea deal that Russia quit on July 17 helped calm global prices and maintain flows to consumers. Russia’s own grain trade is benefitting from Ukraine’s weakness. Its crop exports are booming, and are expected to make up nearly a quarter of global wheat trade in the 2023-24 season.
Ukrainian President Volodymyr Zelenskiy said that within a month after the grain deal broke down there have already been seven attacks on ports with drones and missiles, signaling how challenging it has been to find reliable workarounds.
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