The blockade of seaports threatens businesses with bankruptcy—farmers
28 July 17:06
The prolonged blockade of Ukraine’s seaports threatens to create a massive surplus of agricultural products, which will put pressure on the market throughout the entire marketing year; purchase prices are already even lower than the full cost of production. This was stated by the All-Ukrainian Agrarian Council, according to "Komersant Ukrainian".
“The All-Ukrainian Agrarian Council (VAR), which represents the interests of more than 1,400 small and medium-sized agricultural enterprises in Ukraine, has appealed to Prime Minister Serhiy Koretsky to immediately implement anti-crisis measures due to the suspension of ship calls at Ukrainian Black Sea ports,” the statement reads.
The ALL emphasizes that the combination of problems with maritime logistics, damaged port infrastructure, export restrictions, and rising resource costs poses a threat of unprofitable production, business bankruptcies, and a disruption of the production cycle.
“The challenges currently facing the agricultural sector, when considered as a combination of factors, are significantly more dangerous and have more severe consequences than even those faced in 2022. A crisis of unprofitable production is rapidly looming over the agricultural sector, which will have a negative multiplier effect on the entire economy,” the UAA statement reads.
According to estimates by UAF experts, in the 2026/2027 marketing year, production of major grains and oilseeds will total approximately 81.4 million metric tons, and taking into account carryover stocks, the total supply of products for domestic consumption and export will reach about 85 million metric tons.
At the same time, Ukraine needs to export approximately 67 million metric tons of agricultural products. However, if seaports remain closed, export capacity could drop to 1.7 million metric tons per month, creating a surplus of products on the domestic market.
“A prolonged blockade of seaports threatens to create a massive surplus of goods—between 27.4 and 32.4 million metric tons of agricultural products will put pressure on the market throughout the entire marketing year,” the UAA notes.
According to the association, purchase prices have already begun to plummet due to traders halting their purchases. In some cases, they have fallen to 7,000 UAH per metric ton, which is below the full cost of production.
“The situation calls for immediate decisions. This is not a matter of a typical seasonal downturn in market conditions, but rather the risk of a disruption in the production cycle in one of the key sectors of the Ukrainian economy,” the UAA emphasized.
To prevent a large-scale economic and banking crisis, farmers are calling on the government to implement an anti-crisis package of measures. Among the proposals are preferential loans to replenish working capital for the fall planting season, restructuring of existing agricultural loans, government loan guarantees, and a review of certain terms of the “5-7-9%” program.
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The UAF also proposes conducting an audit of damage to the port infrastructure of Greater Odesa and the Danube ports, identifying priority facilities for restoration, and directing funding toward the repair and modernization of transshipment facilities.
“The extraordinary circumstances facing the agricultural sector and the country’s economy as a whole require equally extraordinary solutions that go beyond the authority of the Ministry of Agrarian Policy and can be resolved exclusively at the level of the Cabinet of Ministers of Ukraine — the appeal states.
At the same time, farmers called on the Prime Minister to hold a personal meeting with representatives of the Ukrainian Agrarian Council to discuss urgent measures to support the sector.
Ship traffic in ports has been halted
As a reminder: As of July 23, the entry of ships into Ukraine’s Black Sea ports has been suspended due to the threat of Russian attacks. This was preceded by weeks of airstrikes on Ukrainian Black Sea ports.
Maersk has also suspended services at Black Sea ports due to intensified Russian strikes on port infrastructure.
As a result of Russia’s pressure on the Ukrainian maritime corridor, Ukrainian traders have begun rerouting some of their wheat and other cargoes to the Danube; however, for the most part, exporters are not prepared to compensate for the loss of the maritime route at any cost and are taking a wait-and-see approach.
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