Ukraine's deep-water grain exports effectively halted after Russian port strikes, says market participant

Massive Russian attacks on Ukraine's ports have effectively brought the country's deep-water grain exports to a standstill, Bohdan Kostetskyi, operating partner at Barva Invest, told Latifundist.com.

According to him, most major grain traders have suspended grain purchases on a CPT basis for deep-water ports, while some export terminals have temporarily halted operations.

"Virtually all major market players have stopped purchasing grain on a CPT deep-water terminal basis. As of today, Ukraine's deep-water grain exports have effectively come to a halt," Kostetskyi said.

He noted that the disruption has already affected the domestic market. Since the beginning of the week, rapeseed procurement prices at crushing plants have fallen by around UAH 1,000 per ton (USD 22,37). Grain prices on the domestic market, including at feed mills, have also been declining.

According to Kostetskyi, traders are being forced to factor significantly higher alternative logistics costs into their procurement prices, particularly for shipments routed through Romania.

He also said that following the latest attacks, shipowners have increasingly refused to call at Ukrainian ports, citing force majeure. However, he does not expect maritime exports to be completely suspended for an extended period.

"We are now at the midpoint of a 40-day military coercion campaign aimed at forcing Russia into peace negotiations. There are another 20 days ahead. Ukraine's deep-water exports will likely have to remain 'in shelter' for at least the next 20 days, and possibly longer," he said.

In his view, falling procurement prices will prompt farmers to sell only the minimum grain volumes needed to maintain liquidity, while waiting for the logistics situation to stabilise.

Kostetskyi's assessment was quickly reflected in the actions of Ukraine's largest grain traders and terminal operators, which began revising their operating procedures following the large-scale attacks on port infrastructure.

YUROL TRADING, which operates through the Brooklyn-Kyiv terminal in the port of Odesa, asked its partners to postpone wheat deliveries by five to seven days due to delays in vessel arrivals and limited grain storage capacity at the terminal. The company said delivery deadlines under existing contracts would be extended accordingly.

NIBULON informed suppliers via its Telegram bot that, following the shelling of seaports and merchant vessels, it would reduce grain procurement prices at its elevators starting from 4:00 p.m. on July 15. The company also suspended grain purchases from 2:00 p.m. at the SFGCU and TIS-Grain terminals.

Kernel, whose assets have been attacked by Russia three times over the past five days, also responded to the situation. The company revised procurement prices at its Transbulkterminal in Chornomorsk three times within a single day. Prices were reduced by UAH 200 per ton:

• Class 2 and Class 3 wheat: from UAH 10,400/t to UAH 10,200/t;
• Class 4 wheat: from UAH 9,900/t to UAH 9,700/t;
• Corn: from UAH 10,400/t to UAH 10,200/t;
• Barley: from UAH 9,350/t to UAH 9,150/t.