Ukraine’s spring planting season is starting amid all-out war with invading Russian forces and its outcome could cause huge food shortages at home and abroad.
As a global agricultural powerhouse and food exporter, Ukraine risks not meeting agricultural goals to fulfill orders from its major buyers of China, Turkey, Egypt and Saudi Arabia. Access to financing, and farming inputs like diesel fuel to power farming machinery, pesticides, seeds and fertilizer are at risk.
Their projected shortage, according to a presentation delivered by Kyiv-based Ukrainian Agribusiness Club, is between 40 percent for fuel and 80 percent for fertilizers.
The still unknown situation of how much will be grown and eventually reach domestic and foreign markets is part of the equation for the World Bank (WB) to say on April 10 that Russia’s invasion will shrink Ukraine’s economic output by 45 percent.
“Although the magnitude of the contraction will depend on the duration and intensity of the war,” the WB said, adding that “Russia’s economy has already plunged into a deep recession with output projected to contract by 11.2 percent” this year.
Russian dictator Vladimir Putin ordered a renewed invasion of Ukraine on Feb. 24 in a bloody war that is in its second month. Moscow forces first invaded the country in 2014 and seized Ukraine’s Crimean Peninsula and parts of the easternmost regions of Luhansk and Donetsk.
Total economic losses – direct and indirect – since the beginning of the invasion has caused total monetary damage of up to $600 billion, the Kyiv School of Economics (KSE) said on April 11.
“During the 47 days of Russian aggression in Ukraine, 23,000 kilometers of roads, 37,000 square meters of real estate, 319 kindergartens, 205 medical institutions, 546 educational institutions, 145 factories and enterprises were damaged, destroyed or seized,” KSE said.
The statement added: “In addition, 54 administration buildings, 277 bridges and bridge crossings, 10 military airfields, 8 airports, 2 ports were damaged by the war. Thus, as of April 11, at least 74 religious buildings and 62 other cultural buildings were damaged, destroyed or seized.”
Ukraine’s agricultural output normally feeds 400 million people, excluding the Ukraine’s pre-war population of 40 million-44 million.
It is the world’s top exporter sunflower oil, second in honey, third in barley and rapeseed, fifth in wheat and walnuts, and seventh in poultry.
Now, much of what Ukraine produces currently can’t be shipped through sea ports because Russia is blockading vessels in both the Azov and Black seas – seaborne exports account for 98 percent of Ukrainian food exports, according to the Ukrainian Agribusiness Club (UCAB).
Only about 70 percent of available farmland will be used for planting, the non-profit group said, with “farmers planning to seed less corn, and more soybean and sunflower.”
Thus, to reach markets, Ukraine is redirecting export flows to the European Union via railway networks and ground transportation to ports on the Black and Baltic Seas.
Current stocks of grain exports for export amount to 20 million metric tons for up to 24 months, UCAB, said.
“No export = no money = no further crops,” the group cautioned.
“They [Ukraine] have grain in storage which they would normally be selling out of storage to export, but how do they transport the grain to ports, and how do the ports export the grain given they are in conflict zones?” said Timothy Ash of London-based Bluebay Asset Management. “This suggests a catastrophic loss for the agricultural sector in the year ahead.”
Actions that need to be taken “urgently,” UCAB said, is international pressure, mainly by Ukraine’s main grain and food buyers.
The group also is calling for “embargo and blockade of Russian sea exports” as well as for Ukraine to receive “powerful anti-ship weapons” and for the U.S. and British navies to clear the Black Sea of mines.
