An important victory in the great war: How Ukraine managed to create the Grain Corridor without Russia
In the past year, thanks to the Armed Forces and business confidence, Ukraine managed to win an important economic victory. Despite Russia’s withdrawal from the Black Sea Grain Initiative and attacks on port infrastructure, Ukrainian grain export by sea is growing.
Without Russia: the Grain Corridor under the protection of the Armed Forces of Ukraine
The full-scale invasion of Russia completely stopped the work of Ukrainian seaports and subsequently export routes, which have been vital for the economy. Millions of tons of grain were locked up in warehouses.
The temporary solution was the resumption of exports from three Ukrainian ports on the Black Sea within the framework of the "Black Sea Grain Initiative", launched with the participation of the UN, Turkey and Russia, which in return demanded the lifting of part of the sanctions. Thanks to this agreement, from August 2022 to July 2023, 32.9 million tons of agricultural products were exported from Ukraine to countries in Africa, Asia, and Europe.
17 of July 2023 Russia withdrew from the Black Sea Grain Initiative and attacked port grain infrastructure to cut off Ukrainian food access to world markets. In exchange for the restoration of grain agreements the Russian Federation demanded the lifting of sanctions imposed on it. However, Ukraine together with its international partners did not give in to Russian blackmail. On August 8, the Naval Forces of the Ukrainian Armed Forces opened new temporary routes for the movement of civilian vessels from the ports of Great Odessa under the protection of the Ukrainian military.
Shipowners were initially wary of using the new route because Russia threatened to view any ships sailing to Ukraine as potential targets. However, the number of ships heading to the ports of Odesa region was increasing, supported by consistently strong demand from international customers.
"In August, we opened a temporary corridor through the Black Sea. It worked thanks to the support of our Armed Forces and the trust of international partners. Every day, the number of ships entering the ports has been increasing," said Minister of Agrarian Policy and Food of Ukraine Mykola Solskyi. One of these international partners, Niels Troost, investor in the Swiss company Harvest Commodities SA, in his written comment to Censor confirmed words of the minister. "We had full confidence and trust in these projects and immediately agreed to be among the first ones to work together with our Ukrainian partners". Two Harvest Commodities ships – the M/V Riva Wind and M/V Arizona – were among the first to successfully leave the port of Odessa as part of the Black Sea Grain Initiative in August 2023. They delivered 110,000 tons of grain to world markets.
During the first three months 100 ships used the new sea corridor and as of December 19 more than 300 cargo ships already left the Black Sea ports, exporting 10 million tons of cargo to 24 countries of the world.
At the same time, the export role of the Ukrainian ports "Reni", "Ust-Dunaisk" and "Izmail", which were able to avoid the sea blockade of the Russian Federation, is growing. Cargo transshipment in Ukrainian Danube ports for January-November 2023 reached 29.4 million tons, which is more than twice the figure for the same period in 2022 (14.5 million tons).
"The Danube transport corridor performed a very important function. When ports of Great Odesa were not working, the Danube transport corridor took over almost 50% of all export and import volumes. This became our new alternative route," emphasized the Deputy Prime Minister for Reconstruction - Minister of Community Development, Territories and of infrastructure Oleksandr Kubrakov.
According to the data of the State Customs Service, since the beginning of the new marketing year (July-June) till December 27 17.48 million tons of grain were exported. In December only export volumes reached 4.39 million tons.
According to the Ukrainian Grain Association, thanks to the new sea corridor, Ukraine will be able to export to world markets 50 million tons of grain and oilseed crops of the 2023 harvest, as well as about 10 million tons of vegetable oils and meal.
"We will be able to sell most of the grain and other products. For us, this is more than 50% of the country's foreign exchange revenue, which stabilizes the hryvnia. I think there is no much of choice: either the crop will rot, or we will be able to sell. Of course, it is better to sell," the president of the Ukrainian Grain association Mykola Gorbachev said .
He is convinced that traders will cope with this task if the military ensures the safety of shipping at the current level.
State and business: Who helps to export Ukrainian grain?
Neither the new grain corridor nor the export routes from the Danube ports could work without the confidence of businesses that provide logistics under the protection of the Armed Forces and invest in infrastructure development despite Russian attacks targeting Ukrainian ports.
As a result of a massive missile attack on the night of July 19, the Chornomorsk port lost a significant part of its grain export infrastructure.
"The grain infrastructure of international and Ukrainian traders and carriers Kernel, Viterra, CMA CGM Group was the most affected. This is a terrorist act not against Ukraine, but against the whole world," said Minister of Agrarian Policy Mykola Solskyi. However, the business continues to work even in such conditions.
Not only Ukrainian, but also international companies are investing in new grain terminals in the Danube ports, turning the region into a new centre of trade.
"Since the beginning of the blockade, we have considered the Danube as the main alternative route for the export of Ukrainian grain, which will not depend on the whims and manipulative actions of Russia," said Volodymyr Slavinskyi, director of trade of the Ukrainian agricultural holding "Nibulon", which built a grain terminal in the port of "Izmail" .
The Swiss company Harvest Commodities SA is also investing in the construction of its own warehouses in the Port of Izmail, bringing vital modern infrastructure to help grow grain exports from this new trading hub.
"Our investments in local infrastructure and logistics not only create jobs and bring foreign currency to the region, but also ensure that grain from Ukraine will continue to play an important role in providing food to consumers from third world countries, including Africa," says investor in Harvest Commodities, Niels Troost.
In addition to investments in the Danube region, the Swiss trader continues to help with export of Ukrainian grain from Black Sea ports. People’s deputy, member of the Committee on National Security, Defense and Intelligence, Ihor Kopytin, appreciated efforts of Troost and his company for their support for implementation of Ukrainian grain initiative and investing into local infrastructure.
In total, since 2021, Harvest Commodities has exported more than 350,000 tons of Ukrainian grain to Turkey, Egypt, China, Italy, Georgia and Croatia, providing access to world markets for both the "State Food and Grain Corporation of Ukraine" and private agricultural companies.
"Grain from Ukraine": How Ukrainian grain supports global food security
The trust and confidence of business and international partners like Harvest Commodities allows not only to ensure the sale of products for Ukrainian farmers, but also contributes to global food security. More than 40 countries and international organizations joined the initiative "Grain from Ukraine", launched by the president of Ukraine Volodymyr Zelensky. Together with leading private companies, they have already collected more than $ 220 million for the purchase of grain from Ukrainian farmers, which is delivered to those countries, which suffer the most from food shortages.
Since the start of this initiative, Ukraine, with the participation of the UN World Food Program, has sent 170,000 tons of wheat to Ethiopia, Somalia, Yemen and Kenya. The program is planned to be extended to Nigeria, Sudan, Mozambique/Malawi, Madagascar, Djibouti, Liberia, Mauritania, Lebanon and other countries. As part of the program, it is planned to send about 60 ships with grain to the poorest countries in Africa.
According to the Minister of Agrarian Policy and Food Mykola Solsky, this proves that Ukraine managed to maintain the status of a reliable food exporter despite the war.
"Our partners see that Ukraine is an efficient and reliable exporter despite extremely difficult conditions. That we fulfil our obligations even during the war and despite the shelling from Russia. Because we understand that our exports affect people's lives in many countries, market prices, and world food security. It is very significant that we have restored the work of the Ukrainian maritime corridor and the Grain From Ukraine program is returning to the ports of Greater Odesa," Solsky emphasized, commenting on the results of the first year of the Grain From Ukraine initiative.
International companies are also ready to support the export of Ukrainian grain to the countries that need it most, despite the risks of wartime.
"We are proud to work with our Ukrainian partners, including both public and private companies, to support and develop the grain trade despite adverse circumstances," says Harvest Commodities investor Niels Troost.
He adds that in addition to helping Ukrainian farmers, foreign business should join important charitable initiatives at this time. Together with its partner in the USA, Niels Troost donated about $ 1 million to organizations helping Ukrainians most affected by the war, as well as Ukrainian military and civilian volunteers on the front line.
Vasyl Melnyk
