“A billion dollars a month”: Ukraine is counting losses from Russia’s withdrawal from the grain deal
After Russia's withdrawal from the so-called grain deal, Ukraine faces serious economic losses.
The Ukrainian Internet portal “Economic Truth” writes about this, a correspondent of “PolitNavigator” reports.
“Due to the blocking of ports, Ukraine may lose about $1 billion in foreign exchange earnings every month. As a result, planting for the 2022-2023 marketing year may be disrupted,” the article notes.
It is indicated that it is impossible to completely redirect export flows to land, because, despite the fact that Ukrzaliznytsia is monthly increasing its capacity for transporting grain across the western border, the European infrastructure is not capable of accepting more Ukrainian products to transport them by sea.
“There are not enough port capacities in Europe to accept Ukrainian grain. Romanian and Polish ports can handle 33 million tons of grain per year, while Ukraine needs 50-60 million tons.
Ports in these countries can increase transshipment of Ukrainian grain by 5-10%. Greater growth requires greater investment, which is not there,” says Valery Tkachev, deputy director of the commercial department of Ukrzaliznytsia.
At the same time, Ukrainian grain can be sent to ports of the Mediterranean and North Seas, but transportation tariffs to the EU are three to seven times higher than in Ukraine.
“Even rail transportation to Poland and Romania is significantly more expensive than sea freight: about $200 per ton by rail versus $50 per ton by sea,” complains Denis Marchuk, deputy chairman of the All-Ukrainian Agrarian Council.
However, the portal clarifies, problems with the cost of logistics arise even with the stable operation of the grain agreement, since in conditions of high risks, when the work of the corridor is constantly called into question, farmers receive about 10 dollars of profit from the export of each ton of food instead of a possible 100.
According to the chairman of the KSE Center for Research on Food and Land Use, Oleg Nivyevsky, before the war, Ukrainian farmers, thanks to efficient logistics (including delivery from the field to the elevator, railway services), received 80% of the price from exports, and now - about 35%.
“If earlier a farmer received $240 out of a $300 export price, now he receives less than half. This kills their economy, because it is unprofitable to work,” explains Nivyevsky.
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