Ukraine’s capacity to export grain and vegetable oil via the Black Sea has dropped by a third due to intensified Russian missile and drone attacks, Reuters reported, citing the nation’s leading farmers’ union.
More than four years into its war with Russia, agricultural exports like grains and vegetable oils remained Ukraine’s main source of foreign currency earnings, with more than 90% shipped through three ports in the southern Odessa region, the 15 July report said.
As part of a deal aimed at allowing both countries to ship grain through the Black Sea, the Odessa ports had been handling about 6M tonnes/month of cargo, Reuters wrote.
However, Moscow and Kyiv were both stepping up attacks on key revenue sources, with Ukrainian forces striking Russian energy infrastructure including oil tankers and Russia intensifying its attacks on Black Sea ports in recent weeks.
“Russia has begun systematically striking port infrastructure, terminals and the entire transport logistics chain,” the trading department of Ukrainian farmers’ union UAC said in a weekly report published on 14 July.
Leading Ukrainian agribusiness and top grain exporter Kernel Holding had announced its sunflower oil trans-shipment terminal in the Odessa region had been damaged in a 14 July attack by Russia, World Grain reported on 16 July.
The strike had triggered a large-scale fire that damaged about half of the terminal’s sunflower oil storage capacity and critical trans-shipment infrastructure, Kernel added.
Approximately 25,000 tonnes of sunflower oil belonging to Kernel – Ukraine’s leading sunflower oil producer and exporter – and a US company storing its product at the terminal were damaged.
Kernel said it had also halted operations at Chornomorsk port due to a series of Russian attacks, World Grain wrote.
As a result of the attacks, monthly grain shipping capacity had dropped to about 4M tonnes/month, UAC said.
Data from Ukrainian Railways showed that the number of grain railcars heading to the Odessa ports dropped by 11% in the week of 2-8 July compared to the previous week while exports fell by 17%.
Analysts from the ASAP Agri consultancy said “the overall reluctance” of ship owners to call at Ukrainian ports had also put upward pressure on freight rates.
According to a Ukrainian-based source quoted in a 15 July Fastmarkets report, the escalation would have an impact, primarily for grains and rapeseed as they were being harvested.
Sources quoted in the report said it remained unclear if the current disruption would be temporary or lead to a prolonged withdrawal of vessel owners from Ukrainian trade routes.
Some market participants said they expected grain flows to increasingly shift towards Romanian export channels through Constanța-Varna-Burgas (CVB), where logistical risks remained lower.
Sources added that exporters could also reroute part of the grain flow through Romania’s Constanța port and the Danube, as they had during periods of intensified attacks in 2022-2024.
However, those routes could not handle Ukraine’s full export volumes, meaning prolonged disruption at Black Sea ports would create logistical bottlenecks and increase export costs, Fastmarkets wrote.
