Agriculture Export Disruptions Pose Challenges with High Crisis Potential

Devastating consequences in the most vulnerable countries must be anticipated

The study’s most important recommendation for action is to keep attention focused on the fact that the worst effects of the disruptions are yet to come next year — when even less new grain will enter the agricultural markets from Ukraine and prices will rise further.

More than one-third of the 141 countries surveyed are vulnerable when it comes to farm exports from Ukraine

It is crucial to ensure accurate analysis of the evolving conditions of food security — and to provide a baseline for further strategy planning, short and long-term. Based on an analysis of trade data and the product balances of countries importing from Ukraine, the study identifies for each product and country pair the share of imports from Ukraine in a country’s domestic product supply.

Why rerouting millions of tons of grain from Ukraine is a daunting logistical challenge

While Ukraine has the third largest rail network in Europe, rail transport is costlier than by sea, and capacity is limited. Ukraine moreover uses a different gauge of track than its EU neighbours — a legacy from Tsarist Russia — so at the border, goods must be transferred to other wagons, or the axles of the trains must be changed.

… and the ongoing reorientation of export channels is not good enough

But rail and road transport alone will not be able to solve the underlying challenge. A recent report by Ukraine’s Ministry of Agrarian Policy and Food demonstrates how the pace of exports in May 2022, despite having picked up in comparison to the catastrophic month of April 2022 — thanks to the rail, road and riverports alternatives -, has still been significantly lower than the same period in 2021. What makes matters worse is that Russia is increasingly attacking Ukraine’s rail and road infrastructure.

Strategically improving and securing infrastructure, transport corridors and waterways

The recent initiatives to improve EU-Ukraine connectivity might be read in conjunction with a previous Bertelsmann Stiftung study on Geopolitical Ambitions in the Black Sea and Caspian Region, which includes specific recommendations for strategically improving and securing infrastructure, transport corridors and waterways in the EU’s eastern vicinity, which has always been a transit region of supra-regional significance with its waterways and shipping lanes. More than ever, railways and other crucial infrastructure are a subject of regional geopolitical tensions between Moscow and increasingly China vis-à-vis the EU and its vicinity.

EU offers temporary trade liberalisation measures

While the recent EU initiative is to be welcomed, allowing for improved market access for all Ukrainian products and, lately, Moldovan agricultural products that are usually subject to tariff rate quotas when entering the EU, this will hardly be a sufficient measure of solidarity.



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Global & European Dynamics

Global & European Dynamics

Our mission on this blog is to shed light on Europe’s role in the world economy.