Russia destroys 280,000 tonnes of Ukrainian grain after leaving Grain Initiative
The UK government has stated that Russian missiles and drones have destroyed 280,000 tonnes of grain since July 2023 when Russia unilaterally withdrew from the Black Sea Grain Initiative
Source: Financial Times
Details: Over the past two months, Russia has launched a wave of drone attacks on Ukraine's Danube ports. The goal was to disrupt Ukraine's economic infrastructure and export routes created to break Moscow's blockade of the Black Sea.
Over the past 12 months, Ukraine, which produces half of the world's sunflower oil exports and 10% of wheat, has exported around 35 million tonnes of grain across the Danube.
Together with rail freight through Europe, this has provided vital economic support for the country's war against the Russian occupiers.
But how long Ukrainian companies can cover the additional costs of these alternative routes has become a pressing question, especially after Russia withdrew from the Black Sea Grain Initiative, which allowed 33 million tonnes of Ukrainian grain to be safely exported.
"Ukrainian farmers are increasingly losing any point to grow crops as they are simply losing money," comments Yevhen Osypov, Executive Director of Kernel.
He predicts that the high costs will undermine Ukrainian grain production and cause exports to halve from last year's level to around 35 million tonnes in 2024.
Viktor Berestenko, president of the Association of International Freight Forwarders, says it costs about US$116/t to export a tonne of grain to Egypt via the Danube, in comparison with about US$69/t before Russia's full-scale invasion last year.
Ukrainian farmers and shippers noted that the Danube's capacity can be expanded further.
"The advantage of the Danube is that there are many places to load and the infrastructure is distributed. This also means that Ukraine does not dance to Russia's tune," says Andrii Vadaturskyi, CEO of Nibulon.
Background:
Ukraine has submittedva proposal for Türkiye to go back to the Black Sea Grain Initiative without Russia, as there are no restrictions on ships passing through the corridor in the territorial waters of Romania, Bulgaria and Türkiye.
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