Port shutdown makes grain logistics costlier by $50 per tonne - Ministry of Agrarian Policy

After the shutdown of Ukrainian seaports, grain transportation costs have increased by approximately $50 per tonne. Further price increases could reach $70 compared to the period before port shipments were suspended.

This was announced by Minister of Agrarian Policy and Food of Ukraine Taras Vysotskyi. According to him, farmers can use alternative export routes, but they are more expensive and have limited capacity.

The government is working on new solutions aimed at reducing market tension and curbing further increases in logistics costs. The problem is particularly acute during the harvesting campaign, when producers need funds for settlements and preparation for the next sowing season.

UAH 80 billion in loans allocated to support farmers

One of the support tools is the expanded “5-7-9% Affordable Loans” program. The total lending volume for the agricultural sector under the program may amount to about UAH 80 billion.

The government lifted the restriction whereby only 20% of the loan could be used to replenish working capital. Now agricultural producers can use the majority of the loan to purchase seeds, fertilisers, plant protection products, and fuel, as well as to pay rent and other production expenses.

The interest rate for working capital loans for agricultural enterprises has been reduced from 15% to 10% per annum. Additionally, the government is preparing a mechanism for affordable financing secured by grain. It should allow farmers to obtain money without urgently selling the harvest at undervalued prices.

The rise in logistics costs reduces producers' profits and may affect their ability to finance the next season. Stable operation of seaports remains a key condition for preserving the competitiveness of Ukrainian agricultural exports.

Source: LIGA.net, Forbes Ukraine