Ukraine's Black Sea Ports Lose a Third of Grain Export Capacity, UAC Reports
Impact of Russian Attacks on Ukraine's Grain Export Infrastructure
By Pavel Polityuk
KYIV, July 15 (Reuters) - Ukraine has lost about a third of its capacity to export grain via its vital Black Sea ports due to intensifying Russian missile and drone attacks, the country's main farmers' union said.
More than four years into its war with Russia, agricultural exports like grains and vegetable oils remain Ukraine's biggest source of foreign currency earnings, with more than 90% shipped through three ports in the southern Odesa region.
Under a deal meant to allow both countries to ship grain through the Black Sea, the Odesa ports had been handling about 6 million metric tons of cargo a month.
Both Moscow and Kyiv are now stepping up attacks on key revenue sources, however, with Ukrainian forces hitting Russian energy infrastructure including oil tankers and Russia intensifying its attacks on the Black Sea ports in recent weeks.
Escalating Attacks on Port Infrastructure
"Russia has begun systematically striking port infrastructure, terminals and the entire transport logistics chain, using ballistic missiles again and again," the trading department of Ukrainian farmers' union UAC said in a weekly report released late on Tuesday.
"On average, we can now ship about 4 million metric tons of grain a month," it added.
Ukraine's economy ministry was due to hold a meeting on Wednesday to discuss the port attacks.
Consequences for Global Grain Markets
Ukraine has in recent seasons accounted for about 6% of global wheat exports and about 11% of global corn exports, meaning that the disruptions, if prolonged, could have an impact on global markets.
Potential for Long-Term Infrastructure Damage
While the ports have continued to operate, UAC warned that, if the current intensity of attacks continues and no repair work is carried out, infrastructure could be significantly damaged within several months.
Logistics Challenges for Grain Traders
Industry sources, meanwhile, told Reuters that traders are struggling with logistics headaches.
"The ports have not ground to a halt, but traders are facing problems with procurement, sales, shipments, cargo accumulation, prices and freight," a senior industry official told Reuters.
Data from Ukrainian Railways showed that the number of grain railcars heading to the Odesa ports dropped 11% in the week of July 2 to 8 from the previous week while exports fell by 17%.
Operational Disruptions at Major Terminals
Ukraine's top grain exporter Kernel Holding said this week it had halted operations at Chornomorsk port due to a series of Russian attacks.
And four of the ports' 13 large grain terminals have suspended grain purchases, another industry source said on Wednesday.
Freight Rates and Storage Capacity Issues
Analysts from the ASAP Agri consultancy said that "the overall reluctance" of ship owners to call at Ukrainian ports had also put upward pressure on freight rates.
Bohdan Kostetskyi, an analyst at consultancy Barva Invest, wrote in an article for Ukrainian outlet Agrotimes that the ports had lost a third of their grain storage capacity.
"The loss of around 2.5 million tons in monthly accumulation capacity at deep-water ports has created a bottleneck for grain, with some volumes unable to reach export destinations," he said.
(Reporting by Pavel Polityuk; Editing by Joe Bavier)
