Ukraine’s grain exports held up as railways struggle to cope, analysts say

Ukraine’s railways are struggling with a backlog of grain wagons on the country’s western border as traders look for alternative export routes after Russia’s invasion blocked off the main Black Sea ports, analyst APK-Inform said on Saturday.

Ukraine was the world’s fourth-largest grain exporter in the 2020/21 season, according to International Grains Council data, with most of its commodities shipped out via the Black Sea.

But with war raging along much of the coast, traders are scrambling to transport more grain by rail.

APK-Inform said Ukrainian Railways had opened 12 terminals for traders, but wagons were backing up and the railways would need two or three weeks to process them and send to consumers.

“Traders are continuing to search for the possibility of redirecting exports to the EU by rail or via Romanian ports, but the key barriers remain limited bandwidth logistics ability and its high cost,” APK-Inform said.

It said the cost of delivering Ukrainian grain to the Romanian port of Constanta was 120-150 euros ($133-$166) per tonne. Before the war, traders paid around $40 to transport grain to Ukraine’s Black Sea ports.

Analysts have said Ukraine, which had exported 43 million tonnes of grain from the start of the season in July up to the invasion in late February, could export only around 1 million tonnes in the next three months, due to logistics difficulties.

Before the war, the government forecast grain exports could reach 65 million tonnes this season.

Russia calls its actions in Ukraine a “special military operation” to demilitarise the country. Western countries call it an unprovoked war of aggression.

[Reuters]