Ukraine warns of $10 billion agricultural export loss, seeks €1.1 billion from EU to reroute grain through European deep-water ports
Ukraine's Minister of Agrarian Policy and Food Taras Vysotsky said in Brussels on 28 September that the situation in Ukraine's agricultural sector is the worst since the start of the full-scale Russian invasion, because deep-water Black Sea ports have been blocked for two months. He warned that roughly 30 million tonnes of agricultural products worth about $10 billion could remain unexported, that spring sown areas could shrink by 35–40%, and that the economy could lose up to 5% of GDP. Ukraine has asked the EU for €1.1 billion in new funds to subsidise logistics to deep-water EU ports such as those in Germany or the Netherlands.
Key points
- Vysotsky said on 28 September in Brussels that Ukraine's agricultural sector faces its worst crisis since the full-scale invasion began.
- Deep-water ports in Greater Odesa have been blocked for about two months, halving Ukraine's export capacity.
- Around 30 million tonnes of agricultural products worth about $10 billion could remain unexported.
- Without export routes, spring sown areas could shrink by 35–40% and the economy could lose up to 5% of GDP; budget revenue losses could reach about 90 billion hryvnias a year.
- Alternative rail and road routes through the EU can cover at most about half of Ukraine's agricultural export needs.
- Ukraine is requesting €1.1 billion in new EU funds to compensate logistics costs of up to €50 per tonne to move grain through deep-water EU ports; the money would go to European carriers and logistics operators, not directly to Ukrainian farmers.
- The €1.1 billion could enable an additional 22 million tonnes of exports and bring Ukrainian farmers $7–8 billion in revenue.
- Kyiv expects the funds to be new EU money, separate from existing macro-financial programmes such as the Ukraine support loan.
Why it matters
The blockade of Ukraine's deep-water Black Sea ports has turned agricultural exports into a systemic economic problem, with the minister framing it as the worst crisis in the sector since the full-scale invasion. Roughly 30 million tonnes of produce worth around $10 billion are at risk of staying in Ukraine, spring sowing could fall by more than a third, and the economy could shed up to 5% of GDP. Ukraine's €1.1 billion request to the EU is designed as a logistics subsidy to reroute grain through deep-water EU ports, with the funds going to European carriers rather than directly to farmers, in an effort to keep traditional markets in North Africa, Southeast Asia and the Middle East supplied.
What happened
Speaking to Ukrainian journalists in Brussels during a meeting of the EU Council on Agriculture, Minister of Agrarian Policy and Food Taras Vysotsky said Ukraine's deep-water ports in Greater Odesa have been blocked for two months, leaving alternative rail and road routes through the EU able to cover at most about half of export needs. He warned that approximately 30 million tonnes of agricultural products valued at about $10 billion could remain unexported, that spring sown areas could shrink by 35–40% without export possibilities, that the economy could lose up to 5% of GDP, and that budget revenue losses could reach around 90 billion hryvnias per year. Ukraine has formally asked the European Commission for €1.1 billion in new funds — not from existing macro-financial instruments such as the Ukraine support loan — to compensate logistics costs of up to €50 per tonne paid to European carriers and logistics operators moving Ukrainian grain to deep-water EU ports, including in Germany or the Netherlands. According to Vysotsky, this could enable an additional 22 million tonnes of exports and bring farmers $7–8 billion in revenue. He also said Kyiv does not expect a Black Sea grain ceasefire in the coming months because Russia continues to reject proposals from partners. Kyiv is also in talks with neighbouring countries, including Poland, on increasing rail transit capacity, and has asked Warsaw to allow the accumulation of grain at customs warehouses for onward shipment to third-country markets. The EU wheat quota for Ukraine of 1.3 million tonnes has already been fully used, so further grain movement through the EU must be transit-only.
Background
Ukraine and the EU operate under a free trade zone; the EU quota for Ukrainian wheat exports of 1.3 million tonnes has been restored and already fully used, so further grain movement through EU territory must be transit-only. Alternative rail and road routes through the EU currently cover at most about half of Ukraine's agricultural export needs, and Ukraine is also exploring exports through Baltic ports and through deep-water EU ports in Germany or the Netherlands, with Baltic logistics estimated to add around $100 per tonne. Polish farmers have previously protested and blocked Ukrainian agricultural imports, complicating overland routes via Poland. Turkey has proposed a seven-point plan to unblock sea exports from Ukrainian and Russian Black Sea ports, and a possible grain ceasefire has been among topics discussed between Kyiv and Moscow. Russia has struck Ukrainian grain storage and logistics facilities, destroying up to 90% of modern storage capacity in some areas, and in early September Ukrainian agricultural exports were running at about 40–44% of potential capacity. The European Commission has refused a separate Ukrainian request for €220 million in direct aid to farmers, while the EU is also considering a $250 million World Bank concessional loan to help Ukraine through the end of the year.