Breadbasket Bottleneck

Jun 14, 2022

As the war in Ukraine nears the four-month mark, agriculture issues are still a major concern in Eurasia’s breadbasket.

The good news: Ukraine’s grain, oilseed, and vegetable oil exports jumped a whopping 80% in May (compared to April’s numbers), shipping out nearly 1.2M metric tons of corn and sunflower oil.

The bad news: Although promising, those numbers are dismal compared to May 2021 exports that totaled over 2.7M metric tons.

Before the war started, Ukraine was exporting about 6M metric tons of grain each month. Now in wartime, that number has tanked to around 1M per month.

Port probz: With Russia controlling much of Ukraine’s Black Sea access, exporting all of that grain is… well… tricky.

With no port access, transporting via rail, river, and road through Poland and Romania is the only option.

But reloading that grain onto Danube barges and European rail lines (which are, of course… running on a different gauge than Ukraine) is causing bottlenecks that create delays and drive up food prices.

Sneaky snakes: In an attempt to sidestep sanctions, Russia is stealing grain from Ukrainian territory they currently hold and attempting to sell it via intermediaries and “cunning schemes” to North America, Africa, and the Middle East.

Oh, and this: Along with the shelling of military and humanitarian installations, Russia seems to also be targeting Ukraine’s pantry as well.

According to Ukraine’s deputy agriculture minister, Taras Vysotskyi, the Russian military destroyed a warehouse in Mykolaiv during the first weekend in June.

Its contents? Up to 300K metric tons of wheat and corn.