Ukraine ramps up grain exports via the Danube and railways

Ukraine is expanding the use of alternative routes for grain shipments amid Russian strikes on ports and civilian vessels in the Black Sea. The bulk of cargo is planned to be redirected through Danube terminals and railway 'dry ports,' Reuters reports.

Ship owners have temporarily suspended calls at Ukrainian Black Sea ports for loading agricultural products due to sharply increased military risks. The state has not officially closed the sea corridor, but some carriers are reviewing or canceling voyages.

As a result of Russian missile and drone attacks, Ukraine has lost about a third of its grain export capacity through the ports of Greater Odesa. Their throughput capacity has decreased from approximately 6 million to 4 million tons of cargo per month.

About 1 million tons of grain can be rerouted monthly through Danube terminals. However, this route cannot fully replace the deep-water Black Sea ports due to limited infrastructure and higher logistics costs. Rail routes across the western border are also being considered as an additional supply channel.

The halt in shipping has already led to increased transportation and cargo insurance costs. Terminals and exporters are incurring losses due to downtime, contract cancellations, and infrastructure damage, while Ukrainian farmers are receiving lower purchase prices due to difficulties in getting the harvest out.

Before the escalation of attacks, Ukraine had hoped to export about 43 million tons of grain in the 2026/2027 season. In the previous season, the supply volume exceeded 37 million tons. More than 90% of Ukrainian agricultural exports traditionally went through three ports in Odesa region.

The government states that the impact of the port shutdown on annual exports will depend on the duration of the restrictions. If shipping does not resume within a few months, Ukraine may face further accumulation of grain in warehouses and loss of foreign currency revenue.

Based on materials from: Reuters