Ukraine, which is currently unable to export its 25 million tons of grain to the world markets due to Russia's blockade of the Black Sea ports, is looking for ways to increase its storage capacity on the verge of the harvest season. In this context, the USA and European countries are planning to establish temporary grain silos in Ukraine, which has a shortage of warehouses for the new crop to be harvested in July and August.

It has ben said in a recent statement by the Ministry of Agriculture of Ukraine that, “EU governments are considering providing Ukraine with temporary storage facilities. This will significantly help protect the harvested crop and secure the grain supply for world markets.” Giving information on the subject, Deputy Minister of Agriculture of Ukraine Markiyan Dmytrasevych said, “We urgently need temporary grain storage equipment such as modular structures and nylon bags.”

GRAIN SILOS FULL AHEAD OF HARVEST

According to the President of the Ukrainian Grain Association, Nikolay Gorbachov, about half of the grain silos in the country are full on the territory under the control of the Ukrainian government. During his speech at the International Grain Council (IGC) conference in London, Gorbachov said that there is a total grain storage capacity of 55 million tons in the regions under the rule of the Kyiv administration, of which approximately 30 million tons are in use. Stating that the grain storage capacity in Russian-controlled areas is 13-15 million tons, Gorbachov warned that if the blockade in Ukrainian ports goes on, the newly harvested grain will remain in the field. According to Gorbachov, if the blockade of ports continues, half of this year's crop will not be harvested in Ukraine, the world's fourth largest exporter of corn. Ukraine's Minister of Agriculture Mikola Solski also noted that when the autumn corn harvest is over, the shortage of storage capacity may reach 15 million tons.

TEMPORARY SILOS TO POLISH BORDER

American and Western authorities are also planning to build temporary silos in Ukraine and neighboring countries in an attempt to rapidly increase grain storage capacity in Ukraine. US President Joe Biden announced in Philadelphia that they will build temporary silos on the border with Ukraine, including Poland, to facilitate grain exports from Ukraine and rein in food prices soaring due to the war.

Biden said that they are working on a plan to export Ukrainian grain by rail, but there are logistical obstacles in this regard. Ukrainian trains have a wider track gauge than other tracks in Europe. Therefore, grain on trains departing from Ukraine has to be transferred across the Polish border. Biden stated that despite the logistical problems, temporary silos are a good option for now and can help Ukraine save some time.

RAILWAY OPTION FOR WHEAT EXPORT

However, the Ukrainian authorities discredit that the railway option will be a real solution. Stating that grain exports cannot be made more than 2 million tons per month via alternative routes such as highways, rivers and railways, Nikolay Gorbachov noted that Ukraine can export 20 million tons of grain next year at best, without using the Black Sea ports. Gorbachov reminded that they shipped 44.7 million tons of grain to the world markets last year and added, “No solution can be found for grain exports without access to Black Sea ports.”

It is expected that the yield in Ukraine, where 106 million tons of grain and oilseeds were produced last year, may decrease to 65 million tons this year due to the invasion of Russia.

While there is a global food crisis concern, nearly 25 million tons of Ukrainian grain lying idle in silos. Negotiations are continuing for the establishment of a grain corridor in the Black Sea with the diplomatic efforts of Turkey in order to transport this grain to the world markets. But the US is skeptical of Moscow, which wants sanctions relief in exchange for a grain corridor.

BLACK SEA GRAIN CORRIDOR

President of the Ukrainian Grain Association, in his speech in London, argued that talks between Turkey and Russia are unlikely to provide the necessary security guarantees for grain shipments. Instead, he urged the United States, Britain and France to create a security corridor for ships transporting Ukrainian grain out of the country. “I do not believe that any insurance company will load grain from Ukraine, even if the Russians sign an agreement with the Turks. Insurance companies do not cover this risk. We need international warranties. Only then can we ship our grain,” Gorbachov said. However, the USA and the EU do not take kindly to such an offer, which would pose the risk of conflict with Russia.