By Olena Harmash
ZHYTOMYR REGION, Ukraine, Aug 13 (Reuters) – Ukrainian farmer Serhiy Rybalko lost two-thirds of his land when Russia occupied a large part of southern Ukraine at the start of the invasion in 2022.
Now he is suffering a different kind of torment as a potentially good harvest is thrown into jeopardy by a Russian campaign of attacks that has almost halted agricultural exports from Ukraine’s Black Sea ports.
Ukraine is among the world’s largest producers of wheat, corn and sunflower seeds and around 90% of its exports of such crops go through the Black Sea.
Compounding the problem, Ukraine’s wheat harvesting campaign is at its peak. Rybalko’s grain storage is already nearly full and Ukraine’s corn harvest is due to start next month.
“There is nowhere to send this grain,” the 57-year-old farmer said as he stood at his silo. “This is a complete disaster for farmers.”
Previously, Rybalko sold to major Ukrainian grain exporter Nibulon and to local processing plants, but now no-one is buying, he said. Nibulon did not respond to a request for comment.
“Everything has just stopped. Finances have ground to a halt. Revenue streams have dried up. There are no exports,” Rybalko said.
IMPLICATIONS FOR UKRAINE AND THE GLOBAL ECONOMY
Farming accounts for nearly 60% of Ukraine’s export revenues, and the blockade adds pressure to the fragile wartime economy.
Ukraine has increased its attacks on Russian vessels in the Black Sea and the Sea of Azov, as each side in the more than four-year war tries to cripple the other’s economy.
As Russia is also a major food exporter, the escalation has major implications for inflation as record heatwaves and war in the Middle East, as well as in Ukraine, drive up costs.
“Ukraine supplies around 6% of the world’s wheat and around 11% of its corn,” said Denys Marchuk, deputy head of Ukraine’s main farmers’ union UAC.
He warned of famine in some import-dependent countries across Africa and the Middle East, which are major buyers of Ukrainian grain, unless supplies arrived on time.
THE NEXT HARVEST COULD ALSO BE AT RISK
Ukraine expects a grain harvest of about 60 million tons this year, almost the same as in 2025.
But this time round farmers have little hope for next year’s crops. Without exports, they cannot raise enough money for the next harvesting cycle.
While global benchmark Chicago grain prices hit their highest in more than a year in July in response to Black Sea disruption and anxiety about shortages globally, domestic Ukrainian prices have slumped as local supplies have accumulated.
According to analysts’ assessments of all cereal crops, farmers will only be able to make a profit out of exporting wheat and they will be unable to cover production costs for other grains.
“These funds are needed to continue purchasing fuel, pay wages, and prepare for the sowing of winter crops,” said Marchuk.
Rybalko, who borrowed heavily to rebuild his business after the start of the war, says his farm needs to make about 20 million hryvnias ($447,074) a month during the harvest campaign to service loans, pay wages and buy fuel. Without those funds, the autumn fieldwork campaign was under threat, he said.
PREVIOUS BLACK SEA DISRUPTION
The Black Sea, whose waters are shared by Bulgaria, Georgia, Romania and Turkey, as well as Russia and Ukraine, is used to ship crude oil and refined products in addition to grain.
Before the blockade, Ukraine shipped around 4-5 million metric tons a month of agricultural exports via the waterway, according to data from Ukraine’s agriculture ministry.
The country’s shipments were also disrupted at the start of the war when the fears of a food crisis prompted the United Nations and Turkey to broker a deal allowing Ukrainian grain through the Black Sea.
Although Russia exited that agreement in 2023, Ukraine launched its own “grain corridor” along the western coast of the Black Sea through the waters of NATO-members Romania and Bulgaria.
Shipments have nearly stopped again as in July and early August as Russia launched more than 70 attacks on Ukraine’s Black Sea port infrastructure and 62 strikes on vessels, the Ukrainian port administration said.
Data on Wednesday showed grain exports plunged by 75% year-on-year in the first two weeks of August.
Russia says its attacks target legitimate military infrastructure, logistics, and vessels transporting foreign weapons.
EXPORTS ROUTES NEEDED URGENTLY
Grain can keep for several years if properly stored and dried, but Ukraine’s shortage of storage capacity could reach 11 million tons, the agriculture ministry has said. Officials have asked Ukraine’s partners to help provide specialised bags for temporary on-farm storage.
They also say alternative export routes are urgently needed and that finding them could prove much harder than before.
In early 2022, when Black Sea ports were blocked, agricultural exports were re-routed on railways and roads through Ukraine’s western borders.
Oleh Nivievskyi from the Kyiv School of Economics said the scope for negotiating alternative routes had narrowed, in part because of a deterioration in relations with neighboring Poland whose farmers have previously objected to competition from cheaper Ukrainian grain.
A stricter trade regime with the European Union, lower water levels in the Danube River, and Russian strikes on railway infrastructure have also limited Ukraine’s options.
“Ukraine should prepare for the possibility that the economic consequences of the port blockades may be no less severe, or even worse, than last time,” Nivievskyi said on Telegram.
The central bank said last month that Ukraine would lose about $2.5 billion in hard currency revenues in the remaining part of the year due to the blockade.
Its farmers face about $3 billion in losses due to more expensive logistics, the UAC estimated, while Marchuk said it was too early to estimate the threat of bankruptcies.
Already, the agricultural sector’s wartime losses have exceeded $90 billion since 2022 and arable land under cultivation has shrunk by nearly a quarter due to active combat, heavy mining and shelling, and lack of irrigation.
The government has introduced an emergency aid package for farmers, expanding state loan programmes, easing lending requirements and reducing interest rates for working capital loans.
But on the agricultural frontline, farmers need more help.
“The harvest compared to last year’s – and the wheat too – is almost twice as good,” Felix Fyodorov, a farm director in the Kharkiv region, told Reuters. “But prices are half of what they were last year.”
As Rybalko struggled to pay wages and taxes, he was forced to sell some of his early wheat at a low price just to raise cash and pay for a few days of diesel.
The most pressing problem is to somehow secure the next year’s harvest.
“If Ukraine does not sow its crops today, if Ukraine does not sow rapeseed, which is needed by the Poles and the Germans, does not sow its wheat, does not sow its winter crops, and does not prepare the soil for spring work, then in a year’s time we will see a real food crisis.”
($1 = 44.7353 hryvnias)
(Reporting by Olena Harmash; Additional reporting by Vova Pavlov in Kharkiv, Pavel Poltyuk in Kyiv; Editing by Daniel Flynn and Barbara Lewis)
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