Grain exports from Ukraine have begun, but it may already be too late for millions of people

By Chloe Sorvino

For six months, ships full of grain remain stuck in the ports of the Black Sea, victims of Russia’s unprovoked attack on Ukraine. Now, some of them have started their journey, amidst the dangers of the war zone, with cargo, however, which in some cases is considered of dubious quality.

“All it takes is a missile launched over there and it hits something, then everything will stop,” says John Rich, president of Ukrainian agricultural products giant MHP, which has continued to operate in the country unlike many of its competitors who have since abandoned it. the start of the war. “There is light at the end of the tunnel as far as ports are concerned. But that tunnel could be closed in the blink of an eye. Just one move and that’s it. The risk is great”, he explains.

The first ships have already left Ukraine bound for destinations in the Middle East and Africa, where millions of people are struggling to cope with a worsening food crisis. There are now areas where famine is worsening due to the drought that has hit many countries. In East Africa, for example, one person is likely to die every 48 seconds from extreme hunger, according to a related Oxfam report published in May.

These exports are therefore vital to the fight against hunger, but grain may not provide the solution to the extent expected. With the outbreak of war in February, crews abandoned their ships, many of which were out of action for six months. This means that many of them have not been ventilated as they should be. It is therefore possible that much of the grain has become moldy or developed mycotoxins from the humidity of the open sea.

At the same time it is doubtful whether the ships will manage to reach their destinations. The first ship to leave the port of Odessa, the Sierra Leone-flagged Razoni, is anchored in the Mediterranean Sea near Turkey, according to the Lebanese government. Rich, whose company normally processes 3 million tons of Ukrainian grain a year, says the ship was likely delayed because the quality of the grain had deteriorated and its cargo may have to be resold. Usually, ships are unloaded within two weeks. However, this one was in the port of Odessa for months.

“The quality of the grain is questionable, from what it sounds like,” says Rich.

Meanwhile, even getting ships out of Ukrainian ports is an extremely difficult task. In addition to the minefields, southern Ukraine is largely an active war zone. The Ukrainians have launched counterattacks in an attempt to retake the port of Mariupol, among other areas. The troops however suffered heavy blows from the artillery of Russia.

This is the other reason why MHP, which also raises chickens and sunflowers, is in no rush to send tons of products to Odessa for export.

“As an entrepreneur, what can I do? Wait,” says Rich. “As far as MHP is concerned, we don’t want to lead this. We will probably wait, storing our grain, until we see how the situation develops”, he adds.

Whenever products leave MHP’s warehouses, they are often headed to Europe by truck and train, via Ukraine’s western border. Demand from wealthier European countries is strong as drought and a host of other problems have resulted in crop destruction.

Most of the Ukrainian grain that Europe is now receiving was destined for Middle Eastern and African countries such as Egypt, where people are struggling to buy enough grain. MHP has several 15-year-plus contracts with countries in the Middle East and Africa, but which, according to Rich, the company has not been able to fulfill.

Ukraine and Russia’s exports account for 30% of world grain trade and almost 70% of sunflower oil. In 36 countries, they supply more than half of their grain needs. Also, before the start of the war, 98% of Ukrainian grain exports were transported through the Black Sea, which the Russian fleet has blocked since February.

The re-opening of the country’s ports, even temporarily – given that the agreement reached with the mediation of the United Nations has a duration of 120 days – is of great symbolic importance to the global food crisis, notes Abiola Afolayan, a former UN official who is now senior international policy advisor for fighting hunger at Bread for the World.

This is a fragile situation, says Afolayan. “There is concern about the safe exit of grain”, he adds and explains: “The big problem concerns attacks on ships and the exit from the port of Odessa. But this is only one of the critical parameters for solving the global food crisis we face. In no case should it be the only corridor”.

Globally, the UN says that in recent years, the number of people “going hungry” around the world has risen to 323 million from just 80 million previously, with 49 million people in 43 countries at risk of starvation.

MHP is in its final two weeks of harvest and expects to collect about half a million tons of grain in total. The new grain crop across Ukraine is now estimated at around 21 million tonnes, much of which will soon be ready for export. However, again, this year’s crop is about 50% smaller than last year’s.

It is also said that there are still about 25 million tons of grain stuck in Ukraine’s warehouses from last year’s harvest, which must be sold and exported soon, otherwise they will also go to waste. After all, the storage areas must be emptied in view of the winter harvest.

Another complication facing MHP and its competitors in trying to export their grain from Ukraine is related to commodity futures prices, which have returned to pre-war levels of $9/bushel, from $14/bushel where they had soared in May. This means that companies, like MHP, are “compensated” for the additional risk they face.

This makes MHP less willing to take on risk, according to Rich. At the same time, the question is being raised as to whether Russia could continue to target ships departing from Ukrainian ports in a “perverse” attempt to limit global grain supply in order to raise the price for Russian wheat that is exported. Such a pitfall is likely, says Rich. He adds that this is another reason why he is tentatively planning MHP’s return to the port of Odessa. “They could raise prices drastically,” he says. “That’s why I’m very, very cautious.”

The next two weeks, however, during which farmers complete the summer wheat harvest and more ships are expected to make the perilous journey out of Ukrainian ports, will be critical for the millions of people who rely on Ukraine’s food exports .

“As the Black Sea ports become more and more safe for all of us, of course we will increase our exports as much as we can,” says Rich. “We have had customers in the Middle East and Africa for the past 15-plus years. We want to honor our original agreements. But I don’t know if we will be able to do that, given the problems in the supply chains.”