Kernel says grain storage costs could rise 70% if logistics crisis persists

Ukrainian agricultural holdings are raising grain elevator service tariffs as operating costs increase, with Kernel announcing the largest revision. The company has already raised its base tariffs by 20% and says grain storage costs could increase by as much as 70% if export logistics disruptions persist, Elevatorist.com reported.

Kernel said it increased grain elevator service tariffs by around 20% at the start of the new marketing season, reflecting higher energy costs.

"Compared with last year, energy prices have increased by about 20%, and this is exactly how much our overall elevator tariff has changed. We have not included higher labour costs or any other expenses in the new pricing. The increase is solely due to higher energy costs," said Serhii Shcherban, Head of Storage at Kernel.

The company is also preparing new storage arrangements because of export logistics problems. If grain currently stored at elevators is not shipped by the end of September, it will have to be transferred into grain storage bags, increasing storage costs by around 70%.

At Agroprosperis, elevator tariffs have been raised by about 10% this season. Roman Andreikiv, who manages the Agrodar-Bar and Zhmerynskyi elevators, said the company had revised prices for the first time in six years after operating under 2021 tariff levels.

VITAGRO said it had increased tariffs by 10-12%. According to Illia Krokhmalov, Director of Oilseed Processing and the Volochysk Elevator, the increase was driven by higher energy prices and rising overall operating costs.