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Russian Forces Targeted Two North American-Owned Grain Terminals in Ukraine

Alistair MacDonald, Bojan Pancevski and Drew Hinshaw reported in today’s Wall Street Journal that, “Russian forces targeted at least two large North American-owned grain terminals in the Ukrainian port of Mykolaiv on Wednesday, as part of what Kyiv and Western governments say is a campaign to degrade Ukraine’s ability to export food.”

Canadian agribusiness Viterra and U.S. grain trader Bunge Ltd. both said that they had a grain terminal hit on Wednesday.

The Journal writers explained that, “Viterra said its terminal was on fire. The company, which is part-owned by commodities giant Glencore PLC, said there had been no casualties though one employee is being treated for burns. Bunge said there had been no casualties at its plant, which has been closed since Russia’s invasion began.

“Russia has repeatedly hit the bridge that Ukrainian farmers and traders say they use to take grain to the Romanian border and the port of Constanta. A large sunflower-oil processing plant and other grain terminals have also been hit, and Wednesday’s attack is the second time Bunge has been targeted.”

The Wall Street Journal, page A8 (June 23, 2022).

Today’s article added that, “Russia’s invasion has left about 18 million metric tons of grain stranded in Ukraine, heightening fears of a global food crisis after months in which the war has already driven up the cost of food world-wide. The issue is compounding for Ukrainian farmers. They say they are running out of storage space as the harvest season gets under way, and that their fields and equipment have been targeted by Russia.”

“Wartime Harvest Starts in Ukraine But Silos Are Already Stuffed,” by Megan Durisin and Volodymyr Verbyany. Bloomberg News (June 19, 2022).

Bloomberg writers Archie Hunter, Tarso Veloso Ribeiro, and Megan Durisin reported yesterday that, “Infrastructure owned by two major agriculture traders was damaged in Russian attacks at one of the biggest crop-handling ports in Ukraine, adding to the mounting losses suffered by its farm sector.”

The Bloomberg writers noted that, “The attacks come even as delegations from Turkey and Russia said they held a ‘positive’ meeting in Moscow on the exit of grain-laden ships from Ukraine, Turkey’s state-run Anadolu Agency reported earlier. Mykolayiv normally accounts for about a quarter of the country’s grain shipments, and damage there could make it more difficult to restart seaborne trade, which has largely been halted since the invasion.

“‘Even if an agreement were reached today, safe passage could take months to complete,’ Rabobank analysts said Wednesday in an emailed note. ‘A return to Ukrainian export normality is currently not in sight.'”

Meanwhile, Reuters writer Pavel Polityuk reported yesterday that, “Ukrainian grain exports in the first 22 days of June fell by 48% from a year earlier to 907,000 tonnes, agriculture ministry data showed on Wednesday.

“The volumes included 803,000 tonnes of corn, 78,000 tonnes of wheat and 21,000 tonnes of barley, the data showed.”

And New York Times writer Matthew Mpoke Bigg reported yesterday that, “Rather than using Ukraine’s ports to export its wheat, sunflower oil, corn and other produce, proposed alternatives have included either exporting it across Ukraine’s western borders into Poland or transporting it southwest into Romania, across the Danube River and out through the Romanian Black Sea port of Constanta.

“Western leaders have lined up in recent weeks to offer support for these solutions. President Biden said last week the United States was working with Europe to build grain storage capacity in Poland. The European Union’s foreign policy chief called the blockade a war crime. And Prime Minister Boris Johnson of Britain on Sunday called for a ‘long-term effort to develop the alternative overland routes that already exist.'”

The Times article noted that, “But analysts say that while moves to improve alternative routes can increase exports somewhat, they are not sufficient to meet global food demand. They also say that the relentless crop cycle will not wait.

“‘There’s been a mad rush to find alternatives’ for Ukraine’s grain exports, said Mike Lee, a specialist in Black Sea agricultural projects at Green Square Agro Consulting in Britain. ‘But the only real viable route to exporting grain out is through the Black Sea ports, and there’s no alternative to get to the quantities that need to be shifted.'”

In an opinion column in Wednesday’s Wall Street Journal, Seth Cropsey opined that, “About 25 million tons of grain now sit in Ukrainian silos blockaded by Russian ships. By disrupting global food and energy supplies, the Kremlin seeks to spark multiple international crises, forcing the West to pressure Ukraine into negotiations. The U.S. should spoil Russia’s strategy by establishing a maritime corridor with a naval coalition of the willing to ensure Ukrainian grain can reach foreign ports. That would alleviate the global food crisis while undermining a key element of Russian leverage over Ukraine and its allies.”

And Reuters News reported today that, “The crisis around grain trapped in Ukraine must be resolved in the next month, British foreign minister Liz Truss said on Thursday during a visit to Ankara when she offered Britain’s expertise to help resolve the situation.”

Elsewhere, Reuters writer Michelle Nichols reported yesterday that, “Countries should ask the United States for help if they have any problems importing Russian food and fertilizer, a senior U.S. official said on Wednesday, stressing that such goods were not subject to U.S. sanctions over Moscow’s war in Ukraine.

“‘Nothing is stopping Russia from exporting its grain or fertilizer except to own policies and actions,’ U.S. State Department Bureau of Economic and Business Affairs Assistant Secretary, Ramin Toloui, told reporters.”

Also yesterday, Reuters News reported that, “A strong rouble, high export tax, ongoing problems with freight and lack of forward sales are expected to hamper the start of the new export season for Russian wheat in July despite an expected record crop, analysts and traders said.

“Russia, the world’s largest wheat exporter and which supplies mainly to the Middle East and Africa, will start harvesting the new crop within days and amid Western sanctions imposed on Moscow after it sent thousands of troops to Ukraine on Feb. 24.

“These sanctions have complicated the processing of payments for Russian deals in Western banks and deterred many owners of large vessels from doing business with Moscow.”

Keith Good Photo

Keith Good

Keith Good is the social media manager for the farmdoc project at the University of Illinois. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily FarmPolicy.com News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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