Odessa hit by missiles despite

UKRAINE/RUSSIA NEWS Farmers face cashflow problems

Farmers in Ukraine could face new challenges in the winter planting campaign due to high stocks, a shortage of storage and tight and costly logistics leading to current domestic prices being close to the cost of production, AgriCensus reported on 24 June.

Funding the next crop is increasingly a major concern as farmers – who normally use revenues from the previous production to fund the next year’s output – are already close to the point of working at a loss, according to the report.

Exports since Russia's invasion of Ukraine had mainly been carried out by land, trains and trucks, as well as through the river ports of Reni, Kiliya and Izmail, due to the blockage of Black Sea ports, AgriCensus wrote.

However, the alternative forms of transport had led to major bottlenecks forming on the country’s borders with its European neighbours. The situation had also led to a significant increase in logistics costs, which made it difficult to maintain Ukrainian grain and oilseed prices at the same level as global prices.

With the extreme pressure on domestic prices, farmers were likely to have to economise on the use of crop protection products, seeds, fertilisers and machinery.

With estimated production costs for wheat of around US$150-180/tonne level, around US$130-180/ tonne for corn and around US$155-175/tonne for barley, any sales below that threshold were unsustainable for farmers, according to trade sources quoted by AgriCensus.

Odessa hit by missiles despite landmark deal

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Russian forces struck the key Ukrainian port of Odessa the day after Kiev and Moscow reached a landmark deal to allow the resumption of grain and oilseed exports, the BBC reported on 24 July.

Two missiles hit the city of Odessa in the early hours of 23 July, Ukraine’s military was quoted as saying in a social media post, while two more had been shot down by air defence systems.

Under the terms of the deal struck on 22 July, Russia had agreed not to target ports while grain shipments were in transit, the BBC wrote.

The aim of the deal was to secure the passage of grain and oilseeds from three blockaded Ukrainian ports – Odessa, Chernomorsk and Yuzhny – despite the ongoing war elsewhere in the country, The Guardian reported wrote on 23 July.

Ukraine and Russia had signed the deal, backed by the United Nations (UN), following tense negotiations, with Turkey taking a leading role, the report said.

The deal – which took two months to reach – was set to last for 120 days, with a co-ordination and monitoring centre to be established in Istanbul, staffed by UN, Turkish, Russian and Ukrainian officials, the BBC wrote, with the possibility of renewal if both parties agreed.

However, the attack raised new doubts about the viability of the deal, which was intended to release about 20M tonnes of grain, according to a report by The Observer on 24 July.

Russian officials had denied carrying out the strikes, Turkey’s defence minister Hulusai Akar was quoted as saying in the BBC report.

“In our contact with Russia, the Russians told us that they had absolutely nothing to do with this attack, and that they were examining the issue very closely and in detail,” Akar said in a short statement.

European Union (EU) foreign affairs chief Josep Borrell was quoted as saying the attack had shown Russia's “total disregard” for international law.

“Striking a target crucial for grain export a day after the signature of Istanbul agreements is particularly reprehensible,” he tweeted, adding that the EU “strongly condemns” the attack.

UN Secretary General Antonio Guterres also condemned the attack, saying that full implementation of the grain deal was imperative, according to the BBC report.

“These products are desperately needed to address the global food crisis and ease the suffering of millions of people in need around the globe,” a UN spokesperson added.

The deal had been welcomed by shipping companies and grain traders, but even before the missile strike, they had warned that several obstacles remained, including ensuring the safety of seafarers and vessels, along with securing adequate and affordable insurance to cover the transport, The Guardian wrote.

As a first step, Ukraine’s coastal waters would need to be de-mined or, at the very least, a corridor stretching several kilometres would need to be cleared, the report said.

Around 400 bulk cargo ships – designed for transporting agricultural goods between continents and each able to hold up to 50,000 tonnes – would be required for transporting the estimated 20M tonnes of grain stored in Ukraine, The Guardian said.

The deal also stated that all vessels would have to be inspected for ‘unauthorised cargoes and personnel’ – likely a reference to military hardware and trained soldiers that Russia was concerned could be smuggled to support Ukrainian forces, AgriCensus wrote on 22 July.

It also explicitly includes a guarantee that merchant vessels will not be attacked and that Ukrainian territorial waters remain exclusively under the control of Ukrainian authorities, according to the AgriCensus report.

During the blockade of Ukraine’s Black Sea ports, government officials and agricultural producers had been working to increase grain exports using road, rail and river transport, The Guardian wrote.

Those exports hit a new record of 2.3M tonnes in June, according to the International Grains Council (IGC), but this was just a third of the amount which was exported each month by sea prior to Russia’s invasion of Ukraine on 24 February.