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Poster in Jul 21, 2022 02:33:49

Ukraine grain deal won't fix battlefield logistics, top producer says

Ukraine grain deal won't fix battlefield logistics, top producer says

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A deal to resume exports of Ukrainian grain through Ukraine's deep-sea ports could be a game changer, the chairman of Ukraine's top food producer MHP said on Thursday (July 14, 2022), but he warned that getting products to export terminals still presented major challenges.

The war in Ukraine has driven up global prices of grain, cooking oil, fuel and fertilizer, a blockade of Russian seaports has stranded dozens of ships, and nearly 20 million tons of grain are stuck in silos in Odessa.

Russia, Ukraine, Turkey and the United Nations will sign an agreement next week aimed at resuming Ukraine's Black Sea grain exports after talks in Istanbul.

While the potential deal was positive, implementation would be challenging, requiring de-mining of ports in Mykolaiv and Odessa and damaging infrastructure, MHP Chairman John Rich said in an interview.

“We still have to ship the grain to the ports, and infrastructure is difficult, we still have to do so under fire - Mykolaiv and Odessa have been hit by missiles in the past 72 hours,” Rich said.

“I think we (can expect) a fair bit of time and water under the bridge before we can have confidence this is going to solve the problem in the short-term. Medium-term maybe it can relieve things, but I think we have (to play a) waiting game.”

Ukraine and Russia are major global wheat suppliers, and Russia is also a large fertilizer exporter. Ukraine is a significant producer of corn and sunflower oil.

Speaking about Ukrainian grain, Rich said he expected the country to produce more than originally anticipated. The winter harvest is expected to bring in 30 million tonnes, two-thirds wheat and the rest rapeseed and barley.

Summer grains production could be around 38 million tonnes.

“The plus is that we are growing the grains, but I can’t get it out of the country in our own operations, let alone Ukraine generally,” said Rich.

Grain exports must move soon and free up brimming storage facilities to enable planning for the next season’s crop, Rich said.

“If Odessa does not open, do we plant in September? That decision has to be made.” (Reporting by Karin Strohecker, Sujata Rao and Nigel Hunt in London; Editing by Frank Jack Daniel)

|Source: Online/SZK

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