The Ukrainian grain sector is growing its sea export volumes even as Russia continues to target key infrastructure for grain exports, according to Ukrainian media outlet Censor.

Russia’s invasion of Ukraine and shelling of major cities since February 2022 largely halted the operation of Ukrainian seaports and export routes in the Black Sea, which are vital for the economy and for the supply of grain to international markets. With millions of tonnes of grain trapped in warehouses, Ukraine’s role as the ‘breadbasket of Europe’ was under threat.

The Black Sea Grain Initiative, launched with the participation of Ukraine, Russia, the UN, and Turkey, led to the resumption of exports from three Black Sea ports. Two ships belonging to Swiss trader Harvest Commodities – the M/V Riva Wind and M/V Arizona –were among the first to successfully leave the port of Odessa as part of the Black Sea Grain Initiative in August 2022, delivering 110,000 tonnes of grain to world markets. From August 2022 to July 2023, 32.9 million tonnes of agricultural products were exported from Ukraine to countries in Africa, Asia, and Europe.

On 17 July 2023 Russia withdrew from the Black Sea Grain Initiative and in the following weeks attacked grain infrastructure in major ports, including Odessa and Chornomorsk, to cut off Ukrainian access to world markets.

"The grain infrastructure of international and Ukrainian traders and carriers Kernel, Viterra, CMA CGM Group were the most affected. This was a terrorist act not against Ukraine, but against the whole world," Minister of Agrarian Policy Mykola Solskyi told Censor.

The following month, the Ukrainian navy opened new temporary routes for the movement of civilian vessels from the ports of the Odessa region. Although these were under the protection of the Ukrainian military, shipowners were initially wary of using the new route because Russia threatened to view any ships sailing to Ukraine as potential targets. However, the number of ships heading to the ports of Odessa region was increasing, supported by consistently strong demand from international customers.

"In August, we opened a temporary corridor through the Black Sea. It worked thanks to the support of our Armed Forces and the trust of international partners. Every day, the number of ships entering the ports has been increasing," said Minister Solskyi. One of these international partners, Niels Troost, an investor in Harvest Commodities whose ships were first to leave Odessa in August 2022, agreed. "We had full confidence and trust in these projects and immediately agreed to be among the first ones to work together with our Ukrainian partners," he said.

During the first three months 100 ships used the new sea corridor and as of 19 December more than 300 cargo ships had sailed from Black Sea ports, exporting 10 million tonnes of cargo to 24 countries of the world.

At the same time, the export role of the Ukrainian ports at the mouth of the Danube, including Reni, Ust-Dunaisk and Izmail, which were able to avoid Russia’s sea blockade, is growing. Cargo transshipment in these Danube ports for January-November 2023 reached 29.4 million tonnes, which is more than twice the figure for the same period in 2022 (14.5 million tonnes).

"The Danube transport corridor performed a very important function. When the ports of Great Odessa were not working, the Danube transport corridor took over almost 50% of all export and import volumes. This became our new alternative route," emphasised the Deputy Prime Minister for Reconstruction and Minister of Community Development, Territories and Infrastructure, Oleksandr Kubrakov.

According to State Customs Service data, since the beginning of the new marketing year (July-June) til 27 December, 17.48 million tons of grain were exported. In December 2023 alone, export volumes reached 4.39 million tons. Thanks to the new sea corridor, Ukraine will be able to export 50 million tonnes of grain and oilseed crops of the 2023 harvest, as well as about 10 million tons of vegetable oils and meal, to world markets, estimated the Ukrainian Grain Association (UGA).

"We will be able to sell most of the grain and other products. For us, this is more than 50% of the country’s foreign exchange revenue, which stabilizes the hryvnia. I think there is not much of a choice: either the crop will rot, or we will be able to sell. Of course, it is better to sell," the president of the UGA, Mykola Gorbachev, told Censor.

Izmail has become an export hub near the mouth of the Danube. Harvest Commodities is also investing in the construction of its own warehouses, bringing vital modern infrastructure to help grow grain exports from this new trading hub.

"Our investments in local infrastructure and logistics not only create jobs and bring foreign currency to the region, but also ensure that grain from Ukraine will continue to play an important role in providing food to consumers from third world countries, including Africa," said Niels Troost, an investor in Harvest Commodities.

In addition to investments in the Danube region, the Swiss trader continues to export Ukrainian grain from Black Sea ports. Ihor Kopytin, a People’s Deputy and member of the Committee on National Security, Defence and Intelligence, acknowledged Troost and his company with thanks for their support for the implementation of Ukrainian grain initiative and investment into local infrastructure.

The trust and confidence of business and international partners like Harvest Commodities not only ensures the sale of products from Ukrainian farmers, but also contributes to global food security. More than 40 countries and international organisations joined the Grain from Ukraine initiative, launched by President Volodymyr Zelensky. Together with leading private companies, they have already collected more than $220 million for the purchase of grain from Ukrainian farmers, produce that is delivered to countries that suffer the most from food shortages.

Since the start of this initiative, Ukraine, with the participation of the UN World Food Program, has sent 170,000 tonnes of wheat to Ethiopia, Somalia, Yemen and Kenya. The program is planned to be extended to Nigeria, Sudan, Mozambique, Malawi, Madagascar, Djibouti, Liberia, Mauritania, Lebanon and other countries. As part of the program, about 60 ships loaded with grain will be sent to the poorest countries in Africa.

According to Minister Solskyi, this proves that Ukraine managed to maintain its status as a reliable food exporter despite the war. Commenting on the results of the first year of the Grain From Ukraine initiative, Minister Solskyi told Censor: "Our partners see that Ukraine is an efficient and reliable exporter despite extremely difficult conditions. They see that we fulfil our obligations even during the war and despite the shelling from Russia, because we understand that our exports affect people’s lives in many countries, market prices, and world food security.

“It is very significant that we have restored the work of the Ukrainian maritime corridor and the Grain From Ukraine programme is returning to the ports of Greater Odessa."

Photo by Erik-Jan Leusink on Unsplash

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