Alternative routes still compensate less than half of Ukraine's agricultural exports

From the beginning of September, Ukraine exported 630 thousand tons of agricultural products via alternative routes. Logistics works better than in August, but so far allows exporting only about 40% of the volumes possible with fully operational sea routes.

This was reported by Minister of Agrarian Policy and Food Taras Vysotskyi.

The largest share of supplies was grain – 380 thousand tons, or about 35% of the potential volume. Oilseeds were exported 94 thousand tons, which corresponds to about 60% of the need, vegetable oil – 97 thousand tons, or 66%, and oilcakes – about 60 thousand tons.

Thus, the situation has somewhat improved compared to August. Then, via alternative routes Ukraine managed to export about 1.7 million tons of agricultural products – roughly 33% of the potential monthly volume.

At the beginning of September, Vysotskyi predicted that under favorable conditions, monthly agricultural exports could grow to approximately 2 million tons, and at most – to 2.5 million tons. Even such a result, however, will not fully compensate for the loss of normal operation of the ports of Greater Odesa.

Danube and railway took on the main cargo flow

After the deterioration of the situation in the Black Sea, agricultural cargo is rerouted primarily to the Danube ports and railway crossings over the western border. Road transport, due to its high cost, remains the smallest channel.

For comparison, as of the end of August, about 600 thousand tons of agricultural products each were exported via the Danube and by rail, while by road – about 80 thousand tons.

The capacities of such routes are limited. Due to additional reloading and longer routes, the delivery times for Ukrainian agricultural products increased by about 40-50%. Earlier, the Ministry of Agrarian Policy also estimated the additional logistics cost of grain at approximately $50 per ton compared to normal sea deliveries.

The logistics problems hit the grain segment the hardest. In August, Ukraine exported about 981 thousand tons of grain – about 2.5 times less than in August last year. In particular, about 605 thousand tons of wheat, 306 thousand tons of corn, and 69 thousand tons of barley were shipped abroad.

The European Commission calls the Danube Corridor one of the main alternative routes for Ukrainian exports and declares readiness to support its operation. Ukraine is working in parallel with Romania and Poland to increase the capacity of alternative logistics.

Farmers need money for crop storage and sowing

Due to slower exports of the harvest, the government is simultaneously trying to expand its storage capabilities and lending to producers. For farmers in frontline regions, more than $12 million has been attracted for polymer sleeves for temporary grain storage.

After the NBU rule change, the liquidity ratio of grain as bank collateral was increased from 0.4 to 0.75. Within the "5-7-9%" program, agricultural companies can attract up to 90 million UAH of working capital financing at 10% per annum, and the government has provided over 20 billion UAH in portfolio guarantees, in particular for the agricultural sector.

According to the Ministry of Agrarian Policy, the pace of lending to the sector is now growing at about 3.5 billion UAH per week. At the same time, for the autumn sowing campaign alone, farmers need to attract up to 80 billion UAH.

Based on materials: Ministry of Agrarian Policy, Ministry of Agrarian Policy, Ministry of Agrarian Policy