Even China Will Feel the Impact: Suspension of Ukrainian Grain Exports Threatens Global Food Security — Leonid Kozachenko

Even China Will Feel the Impact: Halt of Ukrainian Grain Exports Threatens Global Food Security, Says Leonid Kozachenko

For the sixth consecutive day, Ukraine has been unable to export agricultural products through its Black Sea ports.

Russian attacks on port infrastructure and commercial vessels have effectively halted Ukraine's maritime trade in the Black Sea. The most pressing challenge is the suspension of agricultural exports through the country's Black Sea terminals.

At the same time, Ukraine is actively harvesting its new crop, while carry-over stocks from the previous season already exceed 10 million tonnes of grain. Farmers are accumulating unsold grain and facing rising storage costs, while parts of the world are increasingly exposed to the risk of a food crisis.

In an interview with UNIAN, President of the Ukrainian Agrarian Confederation Leonid Kozachenko discussed the severity of the threat posed by the continued disruption of Ukrainian ports, the financial losses facing farmers, the expected impact on food prices, and, most importantly, the possible ways out of the current crisis.

Ships have stopped calling at Ukrainian ports for the first time since 2022. Yesterday, First Deputy Minister of Agrarian Policy Taras Vysotskyi said that shipowners may be overestimating the risks and that the situation could change from day to day. Could maritime shipping resume just as suddenly? If not, what conditions would be required?

The situation is extremely difficult. Maritime traffic has indeed come to a halt. Over the past two weeks, more than 20 vessels have been damaged, and several seafarers have lost their lives. While the exact figures are still being verified, the scale of damage to commercial shipping has been unprecedented throughout the entire period of the full-scale war.

As a result, not only agricultural exports but virtually all cargo transportation through Ukraine's Black Sea ports has been suspended.

Even vessels covered by war-risk insurance are unwilling to sail to Ukrainian ports because Russia has begun using not only Shahed drones but also, for the first time, Banderol drone missiles. This has significantly increased the risks for commercial shipping.

Over recent months, Ukraine exported at least 3.5 million tonnes of grain per month through its Black Sea terminals, while an additional 500,000 tonnes were shipped via rail and road through the European Union. Since the beginning of this month alone, however, approximately 1.5 million tonnes of grain have remained undelivered.

When the attacks first intensified, vessels continued operating despite the damage. Eventually, however, shipping stopped altogether. Today marks the sixth consecutive day without a single vessel heading to Ukraine's Black Sea ports.

Global grain prices have already started to rise. How do you see the situation developing?

The consequences for Ukraine's agricultural sector will be significant. The losses will be substantial because alternative export routes through the European Union—even if they are fully opened—cannot replace maritime exports. At best, EU logistics corridors via Gdańsk and other European ports could handle around 1.6 million tonnes of grain per month, which is far below Ukraine's export needs.

The Danube route also faces serious constraints. Russian forces continue targeting logistics infrastructure in the region, while exceptionally low water levels in the Danube have created an additional challenge. Water levels have fallen to their lowest point in more than 30 years. Previously, barges carrying up to 3,000 tonnes could reach Germany. Today, even transporting 1,000 tonnes as far as Budapest has become impossible in many cases because the river is simply too shallow.

What should be done under these circumstances?

The first priority is to place this issue urgently on the agenda of the United Nations. This is no longer only about Ukrainian farmers—it is about the stability of the global food market.

According to forecasts by the U.S. Department of Agriculture (USDA), global wheat production this year will be lower than last year's harvest. If Ukraine is prevented from exporting its grain, millions of people worldwide will face the consequences, and the number of people suffering from hunger will inevitably increase.

This is precisely why the issue requires international attention. The United Nations must become actively involved. Türkiye should also play a role, particularly in light of the recently signed Free Trade Agreement and both countries' plans to expand agricultural trade. Every possible international partner should be engaged in finding a solution, especially as Ukraine's harvest campaign is now in full swing.

Storage capacity is already becoming a serious concern. Carry-over stocks remain exceptionally high, while farmers are simultaneously harvesting a new crop. Practical solutions are urgently needed to manage these volumes.

One immediate option is to expand the use of grain storage bags, allowing farmers to store grain temporarily until normal export operations can resume.

How will the current situation affect food prices within Ukraine? Will consumers face higher prices?

On the contrary, domestic agricultural prices are likely to decline because farmers are unable to sell their grain on export markets. Without access to international buyers paying market prices, producers are forced to sell at significantly lower prices within Ukraine.

At the same time, many agricultural enterprises will try to keep their grain in storage for as long as possible, hoping to sell it later at prices closer to global market levels. The goal for many producers is no longer to make a profit, but simply to avoid further losses after several extremely difficult seasons.

Over the past two years, grain production in Ukraine has generated virtually no profitability. Farm revenues have been sustained primarily by oilseed crops such as sunflower, rapeseed and soybeans.

Given the more than 10 million tonnes of carry-over grain currently stored in Ukraine, how much does each day of port closure increase farmers' costs during the harvest season? Can these losses be estimated?

The actual volume of grain currently stored at inland facilities is well above 10 million tonnes. Much of it has already exceeded standard storage periods, which are generally designed for no longer than one year. Extended storage significantly increases costs and places an additional financial burden on agricultural producers.

It is difficult to estimate the total losses at this stage, but they will certainly exceed UAH 1 billion. The final amount will depend on how long the disruption continues. If exports remain blocked for more than two months, the losses will be enormous.

On average, producers are currently losing around USD 3–4 per tonne per day, and in some cases losses may reach up to USD 10 per tonne daily.

Some experts suggest the situation could become critical within two or three months. What would such a scenario look like? Would grain remain unharvested, deteriorate in storage, or be sold domestically below production costs?

Unfortunately, all of these scenarios are possible.

Farmers may be forced to sell grain below cost simply because they have no access to export markets. Grain stored in flat storage facilities rather than modern steel silos will gradually lose quality. If grain remains in such storage for more than a year, it may no longer meet commercial quality standards.

Some producers may even decide not to harvest part of their crop because harvesting costs would exceed the expected return. Depending on the extent of unharvested acreage, minimum losses could reach USD 300 per hectare.

Domestic food prices are likely to remain relatively stable for the time being because producers will have little choice but to sell grain on the local market at prices below international levels.

Even under the most pessimistic scenario, however, Ukraine's food security is not at risk. It is impossible to imagine a situation in which the country loses 80% of its cultivated land. In fact, roughly 20% of current production is sufficient to meet domestic food demand.

The greatest consequences will be felt abroad, particularly in African countries that depend directly or indirectly on Ukrainian grain supplies. Other import-dependent regions will also face serious humanitarian consequences, including a heightened risk of hunger and famine.

Ukraine has already experienced a similar crisis in 2022. How prepared is the country to face another one?

Ukraine has repeatedly demonstrated its resilience. Few believed the country would withstand nearly five years of full-scale war, yet it continues to do so.

We will overcome this challenge as well. The price will undoubtedly be extremely high, and it is impossible to calculate its full cost today. Nevertheless, I remain cautiously optimistic that the situation will improve.

I believe the current disruption will not last longer than two months. During this period, the issue will inevitably receive greater international attention. The United Nations will have to address it, while countries that have leverage over Russia will become increasingly involved in seeking solutions.

China will also have to recognize the seriousness of the situation because it is one of the world's largest importers of Ukrainian agricultural products. Before the full-scale invasion, China imported around six million tonnes of Ukrainian grain annually. Today, those volumes have already fallen by half. If exports stop altogether, China, like many other countries, will inevitably face the consequences. The question is simple: where will these countries obtain the food they need?

I believe this reality will encourage more countries to increase pressure on Russia and intensify efforts to reach practical solutions that would allow maritime exports to resume.

One possible scenario could involve mutual security guarantees for commercial shipping. If Russia ceases its attacks on civilian vessels heading to Ukrainian ports, Ukraine, in turn, could refrain from targeting Russian commercial vessels transporting fuel used to finance the Russian war effort.

Personally, I would not welcome such a compromise. In my view, these vessels have long contributed to sustaining Russia's ability to wage war. Nevertheless, various options for resolving the current crisis will undoubtedly be discussed.

Despite the unprecedented challenges, I remain confident that the current situation is temporary. My expectation is that these extremely difficult conditions will last no longer than another two months. After that, I believe international efforts will produce tangible results and the situation will begin to improve.

IC UAC according to UNIAN