$500 mln investment in Danube ensures Ukraine exports will stay strong, TAS Agro says

Alternative shipping routes strengthen export resiliance

Investment in the Danube region and other shipping routes meant that Ukraine would probably be able to continue exporting as much as 25 million tonnes per year of agricultural products, Anton Zhemerdieiev, chief commercial officer of Kyiv-based TAS Agro, said during the Intercontinental Commodity Exchange (ICE) conference in Dubai, on February 19-20. The investment has bolstered the country’s export resilience and meant that it would have options, even in the event that the primary deep water ports of Pivdennyi, Odesa and Chornomorsk were closed or subject to a blockade.

Since the start of the Russian invasion on February 24, 2022, nearly three years ago, the flow of investment into grain terminals and alternative shipping routes has reached $500 million, Zhemerdieiev calculated.

This has allowed Ukraine to expand volumes going out via rail and road, across the country’s western borders with European countries, to 10 million tonnes per year.

Along with that, the Danube port capacity has increased to 15 million tonnes per year.

Consequently, even without access to the Black Sea ports and their capacities, Ukraine would be able to export at least 25 million tonnes per year via the alternative routes.

In addition, the return of more normal working patterns in the country’s Black Sea ports meant that Ukraine was already able to handle 7-8 million tonnes per month of agricultural products via the Black Sea.

Fastmarkets has monitored the export flows from the country, and volumes have been returning to pre-war levels, with current data showing that 91% of Ukraine’s agriculture shipments go by sea, with 85% of the total going through Black Sea deep-water ports.

The share of exports moved by road was 5% while rail exports carried 14%, according to Fastmarkets’ data.

Zhemerdieiev said that one of the biggest changes during the past three years was the switch by many companies from trading only in domestic markets to FOB-basis markets and even on a CFR-delivered basis.

“Ukrainian companies used to sell [on a] CPT [basis] to the ABCD companies, and now they are selling directly to destinations,” he said, referring to the big agriculture trading companies – ADM, Bunge, Cargill and Louis Dreyfus.

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