The outlook for Ukrainian exports is dependent on cross-border logistics in the European Union (EU), according to an AgriCensus report on 22 March.
Russia’s invasion of Ukraine on 24 February had severely impacted exporting logistics in the Black Sea region, the report said, cutting off Ukraine’s export routes.
Although Ukraine's rate of grain exports had dropped significantly as a direct result of the invasion, AgriCensus wrote, spiking international prices and the fact the country had large stocks of key commodities meant it had been looking for alternative opportunities to continue exporting.
Around 98% of grain exports previously went through the country's sea ports, with most of the volume moving through the Black Sea deep water ports of Odessa, Mykolaiv, Chernomorsk, Pivdenniy and Ochakiv, the report said. However, following Russia’s invasion of Ukraine, all the country's key exporting ports had been blocked.
As a result, export options had become limited to rail or truck transport and exports through the smaller, up river ports of Ismail and Reni, which are close to the border with Moldova and usually move Moldovan originated-grains rather than Ukrainian, AgriCensus wrote.
The biggest issue facing grain exports through the land borders with European countries had been the lack of rail loading capacity on the borders, as this had not been the primary method of exporting, the report said.
Meanwhile, the Ukrainian government has removed corn and sunflower oil from the list of products that were officially banned from exports following the Russian invasion, according to official documents reported by AgriCensus on 25 March.
However, the documents did not give an update on previously prohibited goods, the report said, suggesting that restrictions on their export would remain in place.
Although the government had tried to simplify the process of issuing licenses as much as possible, Ukrainian businesses were supportive of the decision to exclude corn and sunflower oil from the list of banned export goods, the report said.
Introduced by an official decree on 5 March, the measures restricted the export of essential commodities such as buckwheat, rye, sugar, millet, oats, salt, livestock, cattle meat and other by-products from cattle, wheat, corn, sunflower oil, poultry meat and eggs, as the country expected increased demand during the conflict.
This list of goods banned for export was expanded on 9 March with the addition of ground or whole rapeseed along with animal or vegetable fertilisers, the report said.
Meanwhile, the EU had been adjusting to the lack of sunflower oil on the market, according to analysis published on 24 March by trade body FEDIOL, which represents the interests of the vegetable oil and protein meal industry in the EU.
“There have been fast reactions of downstream operators who decided to reformulate their product recipes with a view to replace sunflower oil with rapeseed oil where possible,” FEDIOL said.
“In the case of frying oils, there have been replacements of sunflower oil against palm oil, soyabean oil and rapeseed oil. As other oils can be made available from other sources, further temporary replacement and reformulation could take place.”
FEDIOL said it was engaging with authorities to seek flexibility, in particular for food labelling requirements, to allow for short-term variation in the botanical origin of vegetable oils.
Operators were also diverting rapeseed from biodiesel use towards food use, according to the association.
“The short-term assessment confirms that markets are fully functional and that the current market situation is ultimately working to facilitate the redirection of vegetable oils to food,” FEDIOL said. “Public intervention in the biodiesel market, changes to mandates, bans or other restrictions should be avoided… preventing the equally tense situation in the energy market to be further exacerbated.”