By Jean-Paul MacDonald
Ukraine, a cornerstone in the global agricultural network, is grappling with unprecedented challenges. Since Russia withdrew from the Black Sea Grain Initiative on July 18, Ukraine has suffered 17 substantial attacks on grain storage facilities, losing over 300,000 tons of grain and damaging 105 port infrastructures. These actions aren't merely domestic concerns. Every assault affects global food security.
These aggressive measures are believed to be an attempt to induce a food crisis both within Ukraine and internationally. Andriy Dykun, head of the Ukrainian Agri Council (UAC), emphasizes that such disruptions can have cascading consequences for nations reliant on Ukrainian agricultural exports.
He cites the Uman grain storage facility's targeting, demonstrating the widespread nature of these attacks, irrespective of the region.
Dykun passionately states, "The world is essentially being blackmailed by hunger, a tactic deployed by a terrorist nation." He insists on the urgent need for international support, emphasizing that bolstering Ukraine's agricultural sector translates directly to aiding the nation's economy and subsequently the world. Halting food exports can put numerous nations on survival's brink, driving up global food prices.
Resulting from these attacks and the subsequent blockade of seaports, Ukraine's grain exports have plummeted. Monthly exports to Asia, Africa, and Europe have decreased by nearly 3 million tons, constituting a 40% reduction in Ukraine's port export potential.
The damage is extensive, requiring substantial time and funds to restore, making the survival of agricultural enterprises a top priority.
Data indicates that assistance from the International Monetary Fund (IMF) and the United States, though substantial, cannot substitute the potential earnings from open port exports. The financial outlook for Ukraine's agricultural sector in 2023 is bleak.
Rising operational costs against diminishing purchase prices are pushing most enterprises towards bankruptcy. Estimates predict losses exceeding $3 billion by year's end.
For the first time in two decades, the agricultural sector is unprofitable. Despite favorable weather conditions, which should typically support agricultural yields, profitability is dropping. While local food supply remains sufficient, the decline in exports and foreign earnings spells a gloomy future for Ukraine and the global food market.
If you would like to help Ukrainian farmers, SAVE UA is a charitable foundation established to prevent hunger in Ukraine and support the country's agricultural industry. According to a media release from the Ukrainian Agri Council, as of the end of September, more than 7,500 tons of food was distributed by the fund for internally displaced people, and more than 100 agricultural producers were provided with the necessary support.