Logistics collapse persisting on Ukraine's western border - Ukrainian Agrarian Council

MOSCOW. Aug 8 (Interfax) - The export of agricultural products from Ukraine is still being hampered by the presence of queues of grain cars on the Ukrainian western border, the increase by JSC Ukrzaliznytsia (Ukrainian Railways) of its tariffs on transportation by rail, the shortage of available vehicles, and the low purchase price of agricultural crops on the domestic market, the Ukrainian media said on Monday, citing the website of the Ukrainian Agrarian Council (UAC).

"There is a shortage of everything - of transport means, grain cars, trucks. Rail cars with our grain have been on their way to Poland for 2.5 months already and have not yet reached their point of destination. And the same situation is facing all farmers in the region. We are hiring some vehicles, using freight forwarders' services, but this export is just a 'drop in the ocean'," UAC quoted one its members, Perlyna Podillia agrarian firm general director Serhiy Ivashchuk, as saying.

Ivashchuk said that his company currently exports more than 1,000 tonnes of agricultural products per months, whereas its exports before the crisis stood at around 10,000 tonnes per month.

Furthermore, today's purchase prices for grain on the internal market in Ukraine's western regions are slightly higher due to the proximity of the border, but still do not cover production costs.

"The situation on our internal market is probably better than, for instance, in the Chernihiv region. We are being offered higher purchase prices. But, nevertheless, they are lower than the cost of production. Grain is being purchased from us for 4,200 hryvni per tonne, where as the production cost is 6,000 hryvni per tonne," UAC quoted Ivashchuk as saying.

In addition, the 70% rise in Ukrzaliznytsia's tariffs from July 1, 2022 dealt a heavy blow to the agricultural sector and its grain export capabilities, he said.

"Whereas one tonne of barley costs 3,000 hryvni, and the cost of transporting it by rail is also 3,000 hryvni, there is no point in exporting it. As regards a switch to trucks, trucks may queue on the border for five days in both directions, which is outrageous in relation to our drivers. We are trying to expand the dairy cattle breeding in order to replace grain with milk," he said.

Farmers also view the export of agricultural products by sea as risky," Ivashchuk said.

"Farmers' expectations as regards the development of seaborne exports are high, but one ought to look at things realistically. Vessels are currently exporting earlier purchased grain [from Ukraine]. It is unknown when it will be the turn of new deliveries," UAC quoted Ivashchuk as saying.