Grain prices in Ukraine: Impact of the blockade and logistics on the agricultural sector

The Ukrainian agricultural sector, which plays an important role in global grain supplies, has faced a number of challenges, including the blockade of Ukrainian agricultural exports. According to the Ministry of Agrarian Policy, if the situation does not change after September 15 and the grain harvest is at the level of the updated forecasts, grain prices will depend on logistics more than on yields. Economist Andriy Novak shared his thoughts on the situation.

"Everything will depend on the dynamics of the breakthrough of the grain blockade and on alternative routes, including railways, which are also being worked on. In general, the situation will depend more on logistics than on the harvest we will have this year," the expert said.

According to him, a prolonged blockade of Ukrainian agricultural exports may lead to oversaturation of the domestic market. This, in turn, could lead to lower prices for grain and processed products such as flour, pasta and bakery products.

"But in any case, the domestic Ukrainian market will be saturated and oversupplied with products. And not only will there be no shortage, there will be a significant surplus. Each agricultural company will face a choice: whether to supply products to the domestic market or look for opportunities for more profitable exports," summarized Andriy Novak.

Ukrainian agrarians and logistics companies are now actively exploring alternative routes for transportation of their products, and resolving these issues will be key to stabilizing Ukraine's agricultural sector.