Paris The collapse of the Black Sea export corridor, which
allowed the export of more than 32 million tonnes of Ukrainian
grain over the past year, should have little immediate impact but
over the medium term create market tension and push up food
prices.
Little immediate impact
The situation is very different from February 2022, when Russia
invaded Ukraine, which cut off shipping in the Black Sea, the main
export route for Ukrainian agricultural products.
Kyiv was the worlds top exporter of sunflower seed oil and the
fourth-largest for wheat and corn, and its exit from global market
sent prices to record highs in May.
The opening of the export corridor on August 1, 2022, helped
ensure supplies for importing nations and bring down prices, even
if the conflict has cut Ukrainian farm output.
Wheat output is forecast to drop to 17.5 million tonnes in the
2023-2024 season from 33 million tonnes in the 2021-2022
season.
For corn, production is expected to fall to 25 million tonnes
from 42 million tonnes.
In 2023-2024, Ukraine should export six million tonnes less of
wheat and 10 million tonnes less of corn, said Gautier Le Molgat,
an analyst at Agritel, which provides data and analysis on
agricultural markets.
The lack of immediate impact is partially due to timing: it is
currently harvest season in the northern hemisphere.
Future needs will be clear at the end of the harvest, said Le
Molgat.
It is a calm period on the markets which reacted little to the
news of the suspension of the deal, he added.
European wheat futures edged higher, while they fell in the
United States.
Moreover, Russias refusal to renew the deal was
expected and it had already worked to undermine it.
Over the past months weve observed a bottleneck in the Bosphorus
with very slow traffic, due in particular to a low number of
Russian inspectors for the ships using the corridor, said Edward de
Saint-Denis, a trader at commodities trading firm Plantureux &
Associes.
Land routes
Even before the Black Sea corridor was opened the EU had created
Solidarity Lanes, land and river routes designed to facilitate the
export of EU agricultural products via Europe.
The Farm Foundation, a think tank that specialises in
agricultural issues, estimates that half of Ukraines agricultural
exports already takes these routes.
One of the questions that needs to be asked is if the EU, which
has taken half of the Ukrainian grain on offer since the start of
the conflict, has capacity to re-export these volumes, said Olia
Tayeb Cherif, research director at the Farm Foundation.
The EU would like to improve its ability to transport by
harmonising the rail gauge with Ukraine.
They can increase the tempo a bit, but t...