A fare increase by Ukrzaliznytsia could cost the agricultural sector hundreds of millions of dollars
30 June 16:00
Ukrzaliznytsia’s planned 30% increase in freight rates will cost the Ukrainian agricultural sector hundreds of millions of dollars in additional expenses.
This was stated by Pavlo Martyshev, an analyst at the KSE Agrocenter of the Kyiv School of Economics, as reported to the Agronews portal, according to "Komersant Ukrainian".
Earlier, the portal launched a poll on Ukrzaliznytsia’s new rates, and the majority (80% of respondents) agreed that the new increase would fall entirely on farmers’ shoulders: their grain will be bought at lower prices, while fertilizers and fuel will become more expensive.
“The question is who will actually bear this burden. Farmers fear that traders will lower their purchase prices for grain, passing the costs down the supply chain. Traders, on the other hand, say that competition will not allow them to sharply reduce their margins. Processors and exporters are looking for their own arguments,” writes Agronews.
The expert agrees with the survey results. According to him, various market participants currently estimate the additional cost at between $4.6 and $7 per metric ton of grain.
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In particular, the Kernel agricultural holding estimates the additional costs at approximately $4.6 per metric ton, while the Ukrainian Agribusiness Club puts the figure at $5–7.
Martyshev explained that this difference in estimates is due to different calculation methodologies. In some cases, the calculations take into account not only the transportation tariffs themselves but also costs associated with railcar downtime, the transport of half-empty railcars, and the specific logistics routes to various ports.
“At the moment, we can say that transportation costs have risen by several dollars per metric ton. It is not yet possible to give an exact figure,” Martyshev noted.
Grain producers, primarily wheat and corn, remain the most vulnerable to changes in the cost of rail logistics, the analyst says. For these commodities in particular, transportation costs significantly impact the competitiveness of Ukrainian exports, and they will bear the brunt of the new price hike.
Tariff Increases by Ukrzaliznytsia
As a reminder, Ukrzaliznytsia plans to raise freight rates by 30% starting in August 2026 and by another 15% starting in January 2027.
Earlier, Ukrainian industrial, transportation, and sectoral associations appealed to Prime Minister Yulia Svyrydenko and the head of the Office of the President, Kyrylo Budanov, urging them to prevent an unjustified increase in freight rates by “Ukrzaliznytsia” in 2026.
They reported that a 30% increase would lead to a loss of 96 billion hryvnia in GDP per year, a 27-million-metric-ton reduction in Ukrzaliznytsia’s freight volume, a loss of $2.4 billion in export revenue, and a loss of 36 billion hryvnias in budget revenues.
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