Under a landmark deal brokered last week by the United Nations and Turkey, Moscow’s blockade of Ukraine’s grain shipments through the Black Sea will be lifted. If all goes well, a ship loaded with grain will set sail from a Ukrainian port in the coming days, releasing crops from a large breadbasket to a hungry world.
But despite the fanfare in Brussels and Washington, the deal is being greeted cautiously in the fields of Ukraine. Farmers who have lived for months under the threat of Russian missile attacks and economic uncertainty are wary of reaching a deal.
The roar of campaigns in these fields is a known racket this season, but much of the harvest will go straight into storage.
“Opening the Black Sea ports is not in itself the magic answer,” said Georg von Nolcken, chief executive of the Continental Farmers Group, a large agribusiness with vast tracts of land around western Ukraine. “It’s definitely a step forward, but we can’t assume that the deal will bring Ukraine back to where it was” before the war, he said.
The blockage has sparked wild price swings for crops and their transportation costs. Storage is running out for the latest harvests, leaving many scrambling for makeshift solutions.
A missile attack on Saturday that hit Odesa, Ukraine’s largest Black Sea port, shook confidence in the deal and risked undermining the effort before it was even implemented.
“No one believes that Russia will not attack again,” said Vasyl Levko, director of grain storage at MHP, one of Ukraine’s largest agricultural products companies.
There is political will from Ukraine’s allies: The White House welcomed the deal, as did the United Nations and international aid agencies, which have warned of possible famine and political unrest the longer Ukraine’s grain remains blocked.
Freeing up grain for shipment is expected to ease the growing hunger crisis triggered by Russia’s aggression — not so much because Ukrainian grain can be shipped faster to desperate countries, but because more supplies can help lower prices, which they rose after the war but have been falling recently. “It’s quite positive,” said Nikolai Gorbachev, head of the Ukrainian Grain Union. “It is possible to find a way.”
But even when they reopen, Black Sea ports are expected to operate at about half their pre-war capacity, experts say, covering only a fraction of the more than 20 million tonnes of stockpiled grain. The ships will pass through a route cleared of Ukrainian mines used to prevent Russian ships from entering, and will undergo inspections in Turkey to ensure they are not transporting weapons back to Ukraine.
Our coverage of the Russia-Ukraine war
Grain embargo: A major deal aims to lift a Russian embargo on Ukraine’s grain shipments, easing a global food crisis. But in the fields of Ukraine, farmers are skeptical. An ambitious counterattack: Ukraine is laying the groundwork to recapture Kherson from Russia. But the undertaking would require huge resources and could come at a heavy price. Economic havoc: As food, energy and commodity prices continue to rise around the world, few countries are feeling the bite as much as Ukraine. Under siege: For 80 days, at the Avtostal steel mill, a relentless Russian assault met unyielding Ukrainian resistance. So it was for those who were there.
And it is uncertain that many ships will dare to return. Shipping companies that once operated in the Black Sea have followed other cargo routes. Insurers are wary of covering ships in a collision zone, and without insurance, no one will ship. Meanwhile, Ukrainian farmers are struggling with huge amounts of trapped grain from last year’s harvests. Before the war, new crops moved in and out of grain elevators—from harvest to export—like clockwork. But Russia’s blockade of the Black Sea created a huge backlog. An estimated additional 40 million tonnes — wheat, canola, barley, soybeans, corn and sunflower seeds — are expected to be harvested in the coming months. Storage facilities not destroyed by Russian bombing are filling up and space for freshly harvested crops is becoming scarce. At an MHP grain processing center an hour east of Lviv, a truck full of freshly cut canola — tiny, shiny and black — dumped its load into a sieve on a recent day. The seed was transferred to a dryer and then funneled into a towering silo that still had space available. A nearby silo didn’t: It was full of soybeans stuck there from the previous harvest. A bigger concern was what to do with the current winter wheat harvest, said Mr. Levko, whose company uses the grain to produce feed for chicken farms it owns in Ukraine, as well as grain for export. With its silos at the Lviv site close to capacity, the grain will have to be stuffed into long plastic casings for temporary storage. The company was trying to buy more pods, he said, but Russian missiles destroyed the only Ukrainian factory that makes them, and European manufacturers have been overwhelmed with orders and can’t keep up, Mr. Levko said. UPDATED July 29, 2022, 12:56 am ET After the wheat comes the corn harvest. This should be piled on the ground and covered with a tarpaulin to protect it from the thousands of crows and pigeons that hover nearby like dark clouds, as well as the autumn rains, which can create rot, Mr Levko added. “Crops should be stored everywhere,” he said, sweeping his hand across a vast field. He added that even if the Black Sea disengagement deal works, it could be months before Odessa’s shipping capacity helps reduce the grain build-up. Meanwhile, farmers are trying to expand an alternative maze of transport routes they have created across Europe since the outbreak of war. Before Russia’s blockade, Ukraine exported up to seven million tons of grain a month, mostly in ships that can carry large cargoes. Since then, Ukraine has been able to get out only about two million tons a month, through a hastily cobbled patchwork of land and river routes. Continental Farmers Group used to export crops via the Black Sea, Mr von Nolcken said. Deliveries by ship could reach the Middle East and North Africa in as little as six days. But the blockade has forced the company to put some of its seed into a circuitous route that involves a giant counterclockwise loop around Europe on trucks, trains, barges and ships via Poland, the North Sea and the Channel, via the Strait of Gibraltar and back to the Mediterranean, an odyssey that can last up to 18 days. With so many exporters competing to get grain from Ukraine, transportation costs have soared to around $130 to $230 a tonne from around $35 before the war, with eastern regions near Russian-held zones facing the steepest price increases, Mr. von Nolken added. At the same time, grain prices in Ukraine have fallen by about two-thirds because the blockade has left farmers holding too much grain, threatening the livelihoods of many. European countries are working furiously to solve one of the biggest challenges: transporting grain by rail. Previously, Ukraine’s 38,000 grain cars transported crops mostly to Black Sea ports, but they run on Soviet-era tracks that are no match for Europe’s. So rail shipments headed elsewhere now have to be transferred to other trains once they reach the border. The biggest opportunity to scale exports is by truck. Roman Slaston, head of Ukraine’s main agricultural lobby, said his group aims to take out 40,000 tons of grain a day by truck. By June, trucks were turning out 10,000 tons a day. But this still alleviates only part of Ukraine’s delays. And with so much added traffic on the road, border crossings are congested. It now takes four days – instead of four hours, before the war – to get grain trucks from Ukraine to Poland, MFP’s Mr Levko said. To cross the Serbian border it takes 10 days instead of two. The European Union is trying to make it easier to back up with fast border access permits. “The question is, how long will the situation continue?” said Herr von Nolken. “On February 24, everyone assumed this was going to be a week-long exercise. More than 150 days later, we are talking about opening the ports again, with reservations.” But a harsh reality still faces Ukraine. Despite the war, it has been a strong crop so far this year. “We are creating a tsunami of grain, producing more than we can export,” Mr von Nolken added. “We’re going to keep sitting on crops that won’t come out.” Erika Solomon contributed reporting from Lviv, Ukraine.
