Kyiv hopes for pre-war levels: Ukraine exports significantly more grain

Ukraine is ramping up its grain exports. Information from Kyiv even suggests that exports at pre-war levels are possible. That would significantly relieve the markets.

Grain exports from Ukraine are apparently running at full speed again. According to Deputy Infrastructure Minister Juryy Vaskov, the country can export three million tons of grain by sea in September. The amount could be increased to four million tons per month in the future. That’s roughly the amount Ukraine was shipping through its seaports each month before the Russian attack.

Since the resumption of grain exports via the Black Sea as part of the grain deal with Russia on August 1, more than a dozen ships with around 400,000 tons of cargo have left Ukraine, according to official figures. Today the first UN-ordered freighter with 23,000 tons of wheat for Ethiopia left the port of Pivdennyj. According to the coordination center in Istanbul, four other ships loaded with wheat or corn also made their way from Ukraine.

Exports are growing faster than expected

For the next two weeks, 30 freighters from outside have registered to load grain for export in Ukraine, according to Deputy Infrastructure Minister Vaskow.

This means that exports are rising faster than experts had expected. The capacity of the three ports involved in the agreement, Odessa, Chornomorsk and Pivdennyj, had previously been estimated at around three million tons per month. Some experts had assumed that this export level could only be reached in October. In addition to grain exports by sea, there are about two million tons of grain that the country exports overland every month.

Markets still tight

Provided that the planned exports can continue to take place without disruption, the grain supply situation would ease significantly. The grain agreement has so far allowed the export of around 22 million tons of grain. The London-based International Grains Council (IGC) currently estimates the global gap between production and consumption for the 2022/23 crop year at 24.5 million tonnes. Overall, the warehouses are still well stocked. For the beginning of the harvest year, the IGC assumes stocks of 607.5 million tons.

However, the grain markets remain nervous in view of the supply gap. At a good 337 euros per tonne, the trend-setting wheat price on the French futures exchange MATIF is roughly at the level it was in early August, when the Black Sea routes were reopened. At the peak of the supply crisis in mid-May, however, the price had reached a record high of EUR 438 per ton.