Ukraine cuts grain export floor as Russian strikes drive up shipping costs

Ukraine reduced the minimum export prices for agricultural products following attacks on its seaports, prompting exporters to utilize more expensive European routes, according to Agriculture Minister Taras Vysotskyi. The previous system had an indicative grain export price of $220 per metric ton and a minimum price of $180, but logistics costs surged after grain shipments were rerouted through ports like Constanta in Romania, adding $50 per metric ton.

With grain selling for $220 per ton in Constanta, the net price at Ukraine's border was about $170, lower than the previous minimum price of $185. The government lowered the minimum price to ensure Ukrainian grain remained competitive abroad, despite generating a zero profit margin. Farmers and industry associations had requested this intervention due to force majeure conditions at Ukrainian ports, which have been under Russian attack since the 2022 invasion.

The lower price floor aims to allow farmers to maintain operations and prepare for the next planting season. Russian strikes have also halted freight shipments at Odesa Oblast stations, affecting Ukrainian port traffic. The suspension of grain exports through Odesa ports has led domestic wheat prices to drop to one-third of their previous level, with buyers paying 3,000 hryvnias per metric ton for grain purchased directly from farmers' trucks.

The All-Ukrainian Agrarian Council has called for urgent crisis measures to prevent widespread farmer bankruptcy.