Ukraine food trade in trouble as war decimates production and exports efforts slump
30 Jan 2023 --- The number of ships departing Ukrainian ports through the Black Sea Grain Initiative food corridor has fallen to less than three a day, on average, the lowest in months. The war-torn country accuses Russia of artificially blocking the grain corridor via delayed ship inspection.
This is not the first nor the second time that the food corridors have been paralyzed due to inspection delays, as inspections are carried out by authorities from Ukraine, Russia, Turkey and the UN.
Flora Dewar, director of trade and logistics at Coceral, the European association of trade in cereals, oilseeds, rice, pulses, olive oil, oils and fats, animal feed and agro supply, tells FoodIngredientsFirst that the delays in transit are reported to be 60 days on average.
Coceral asked, in November, for more transparency in the inspections, clear rules, prioritization of some vessels and the increase of teams dealing with the inspections. However, Dewar says that Coceral has not seen “any application of our recommendations so far.”
After a deal was brokered to extend the initiative and allow maritime transit of food, in November, inspection delays had ships stuck up to 15 days awaiting inspection. One month earlier, up to 165 ships were stuck. Ukraine also condemned Russia for delaying checks and using food as a tool of war at the time.
During January, grain exports through the corridor have been 2.4 million metric tons, considerably less than the 4 million metric tons exported in September and October.
Ukraine farmers struggle
2023 is set to be a taxing year for Ukrainian farmers as grain output is forecast to decline to around 50 million metric tons, down from 67 million metric tons in 2022 and 106 million metric tons in 2021, before the war, according to the Ukraine Grain Association (UGA).
These projections are a best-case scenario.
“Production could fall more sharply depending on weather and financial difficulties of farms,” says Nikolay Gorbachov, UGA’s head.
Moreover, farmers are producing grain at a loss and cutting planting areas.
Corn has been particularly affected by financial struggles and production could fall to 22-23 million metric tons in 2023 (compared to 41.9 million metric tons in 2021). Corn is relatively more expensive to grow, dry and transport than other crops.
To prevent the country’s agriculture sector from collapsing, FAO is ramping up funding to support the country’s food production and boost supply chains. Generators, modular units, wheat, barley and oat seeds will be deployed to restore critical production and value chains urgently.
Earlier this year, the EU and the FAO announced a partnership to provide US$15.5 million to ensure and support Ukrainian food systems impacted by the ongoing war.
Ukraine has managed to export 30 million metric tons of grains and oilseeds in the 2022/2023 season through the food corridors and alternative land routes toward the EU.
According to the UGA, a silver lining might be the oilseeds production, as rapeseed and soybeans could hold steady this year at around three million metric tons each. The production will continue due to the higher profitability of these crops.
Africa gets smallest piece of the pie
This January, 759,000 metric tons of wheat were shipped through the food corridors. However, only 121,000 were sent to African ports.
In total, 675 ships have sailed from Ukrainian ports with 18.4 million metric tons of food. The share of Europe is 7.5 million metric tons, followed by Asia (5.1 million), the Middle East (3.4 million) and Africa (2.3 million).
12.5% of the food corridor food exports have gone to Africa so far, unchanged from the 13% of the share of exports that the continent had at the end of November). Some countries in the continent are in a severe food security crisis – Zimbabwe experienced a 285.2% inflation of food prices in December, for example.
The WEF Global Risks Report of 2023 also signed that Tunisia, Ghana, Lebanon and Egypt are in simultaneous food and debt crises. The latter is seeing increasing instability due to currency debasing against a strong US dollar, making food imports prohibitively expensive in a country requiring massive food imports.
The UN’s latest data, updated today, puts China as the biggest winner of the Black Sea food corridor, receiving 3.6 million metric tons of food, followed by Spain with 3.3 million metric tons, Turkey with 2.1 million metric tons and Italy with 1.6 million metric tons. In Africa, the largest importer is Egypt, with 683,200 million metric tons of imported food.
By Marc Cervera
This feature is provided by NutritionInsight’s sister website, FoodIngredientsFirst.
To contact our editorial team please email us at email@example.com
Subscribe now to receive the latest news directly into your inbox.