Farmers from the western regions of Ukraine cannot export grain due to traffic jams at the border.

We were grain exporters but because of the war had to reduce exports to a minimum — almost stop them. We miss almost everything — funds, grain wagons, trucks. In addition, it is unclear to which countries to export and how to find counterparties there. Wagons with our grain have been on their way to Poland for 2.5 months and not yet arrived. And this situation is similar for all farmers in the region. We hire some trucks, use the services of freight forwarders, but this export can be called a “drop in the ocean”. Before the war, our exports amounted to about 10,000 tons, and now it does not exceed 1,000 tons of products, which, as already mentioned, have been stuck at the border”, Serhiy Ivashchuk, general director of LLC Agrofirm “Perlyna Podillya” and UAC member, said.

Purchase prices for grain on the domestic market in the west are somewhat higher due to the proximity to the border, but do not cover the cost of production. “Perhaps we have a better situation on the domestic market than, for example, in Chernihiv region, we are offered higher purchase prices. Still, they are below the cost of production. With the production cost UAH 6,000/t, the grain is purchased from us at UAH 4,200/t”, Serhiy Ivashchuk added.

The increase in tariffs by Ukrzaliznytsia hit dramatically the agricultural sector and the ability to export grain.

"If UAH 3,000 are offered for a ton of barley and it costs UAH 3,000 to take it by rail to the border, then it makes no sense to export it. As for the transition of using trucks, they stand at the border for 5 days in both directions — this is making a mockery of drivers. Additionally, grain trucks have their own specifics, so it is difficult to find cargo for the return trip. This is a closed circle from which it is difficult to find a way out. We are trying to expand dairy farming in order to convert grain into milk”, the head of the agricultural company says.

As for the unblocking of sea ports, only the victory of the Armed Forces will lead to full-fledged exports.

Unblocking the ports is all a theory of probability, tomorrow a mine or a missile attack can change everything. The expectations of agrarians in regard to restoring sea exports are high, but it is necessary to look at things realistically. Right now, the previously purchased grain is being shipped out by sea. Nobody knows when there will be the turn for new deliveries. Everything depends on the situation at the front. So far, exports will be conducted in small volumes because of low capacity at the border. As for Odesa, it may take months to establish the export flow. At the moment, to my mind, it is risky to send goods to Odesa, we need the victory of the Armed Forces”, Serhiy Ivashchuk believes.

Monday, 8 August 2022

 

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