Grain stored in Moloha, in the Odesa region of Ukraine. Ukraine once sold over 10% of the world’s wheat, barley and corn, much of it via Odesa. — ©2023 The New York Times Company
VALENTIN Pavlenko loaded two trucks with grain from his farm in southern Ukraine last week. Normally, he sends them two hours east to the deep-water port of Odesa, but this time they headed in the other direction, to the small port of Reni on the Danube river.
He’s not the only grower looking for alternate shipping routes.
The highway west from Odesa is clogged with eighteen-wheelers – hundreds, if not thousands in a week; they are delivering grain to alternate distribution points, now that Russia has not only pulled out of a deal allowing unfettered passage for Ukrainian grain via the Black Sea, but also bombed Odesa and other ports that ring the city.
The high-stakes standoff over grain that is escalating tensions in the Black Sea and raising worries over the global food supply is also creating challenges for farmers across southern Ukraine.
Not only must Pavlenko and others like him find alternate shipping points, but they also have to worry about whether they are secure.
Pavlenko’s farm had already donated some of its trucks to the military.
But when the Russians struck Reni, too, the farmers collective he belonged to scrambled to collect money to buy three flatbed trucks for the Ukrainian army, so they could install air defence systems that would protect the Danube ports.
“We are going to fix up the pick-ups so that if they try to attack again, our boys can shoot them down,” said Pavlenko, 57.
But air defences do not guarantee protection. On Aug 2, Ukrainian forces intercepted 11 Russian drones attacking the Danube port of Izmail, south of Reni, according to Ukraine’s Southern Operational Command. Even so, the attacks damaged a grain elevator and silos, a shipping company office and a marine terminal, the office of the general prosecutor said.
The assault demonstrated Russia’s willingness to keep striking Ukraine’s Danube ports, which are just across the river from Romania, a Nato member.
Agriculture is the lifeblood of Ukraine’s economy.
Before the war, Ukraine produced half the sunflower oil sold worldwide and more than 10% of the wheat, barley and corn.
Under a deal brokered by the United Nations and Turkiye a year ago, more than 33 million tonnes of Ukrainian grain and other commodities were exported, including Pavlenko’s, which went through Odesa.
Before the war, about 70% of Ukraine’s total imports and exports went by sea, nearly two-thirds of them through the ports around Odesa.
In the two weeks since Russia’s withdrawal from the grain deal, Russian attacks have destroyed 180,000 tonnes of grain, 26 port infrastructure facilities and five civilian vessels, according to Ukraine’s Foreign Ministry.
Since the attacks on the Black Sea ports, exporters have had to turn to the more complicated and expensive Danube river. But its ports have a much smaller export capacity, creating frustrating and costly back-ups to load and offload grain.
Gennadiy Ivanov, the director of BPG Shipping, a Ukrainian shipping company that manages grain-carrying vessels, said there was currently a backlog of about 100 vessels in Ukraine’s Danube river ports, and congestion will likely only get worse if more infrastructure is attacked and damaged.
“By trying to destroy infrastructure in the Danube, Russia wants to get Ukraine out of the game completely,” Ivanov said in an interview.
If more damage is done to the ports, he said, “the question is how many terminals can accept vessels”.
He added that insurance premiums to cover the risks for vessels operating at those ports were expected to rise, and that the costs would be borne by Ukrainian farmers, already struggling to earn a living.
Another shipping executive, who spoke on the condition of anonymity out of safety concerns, said his ship had been waiting for more than two weeks to load at the port and has to pay a congestion fee of US$8,000 a day.
Despite the threat of Russian strikes, vessels have continued to load grain along the Danube, according to Alexis Ellender, a global analyst at Kpler, a commodities analytics firm – speaking before the attack at Izmail.
“They will try to maximise movement through the Danube because it’s more efficient to move by sea than by land,” he said. “But there will be capacity constraints in terms of what the ports can do.”
Since the Russian invasion in February 2022, commodity exports via the Danube “have gone up 10 times”, Samantha Power, the chief administrator of the US Agency for International Development, said during a recent visit to Ukraine.
After investments, the ports now have a capacity of 2.5 million tonnes of agricultural goods per month, according to Alla Stoyanova, a regional agriculture official in Odesa.
That falls short of the 44 million tonnes Ukraine expects to harvest this year, but until recently the route had been considered relatively secure.
After the drone strike on Reni – which destroyed 2.5 tonnes of grain, damaged two hangars and injured seven people – farmers like Pavlenko are worried that even this back-up route will be cut off.
After the Soviet Union collapsed, Pavlenko took over a state collective farm covering nearly 1,000ha and put everything he had into building a modern and profitable midsize farming business in the fertile region around Odesa.
He shipped grain, beans, rapeseed and sunflower seeds to the world from the ports ringing Odesa, employing 40 people.
He wants to hand down his business to his sons but said he feels its viability is at risk now, as farmers face increasing struggles to sell their food.
He already had to contend with rising prices for fuel, fertiliser and transport since Russia’s full-scale invasion.
Now, he has to worry about whether his less profitable grain can reach the market at all.
“The ports are closed, there are almost no sales, and there is no free market in which good companies could give a good price because of all of the risks,” he said.
“That’s why we’re selling the grains to buyers who offer any price. Our farm feels like it stopped being a business – now it is just work.” — ©2023 The New York Times Company
