By KYIV. Dec 6 (Interfax-Ukraine) – Ukraine has the potential to reduce by 20% the cost of logistics when transporting grain and oilseeds by reducing the cost of freight of ships that are loaded from the ports of Odesa, which will allow farmers to sell their harvest without losses, said president of the Ukrainian Grain Association (UGA) Mykola Horbachev.
“I think we have the potential for farmers and agricultural producers to receive more money by reducing the cost of logistics. For example, a month ago, logistics to the port of Constanta was at $100/tonne, and in December it was already $70/tonne. If you go from the ports of Odesa, then it’s $60/tonne,” he said during Business Breakfast with Forbes Ukraine on Wednesday.
He expressed confidence that these prices could be reduced by another $20/tonne by reducing freight rates.
According to his information, currently the freight for loading ships from Ukraine is twice as high as from the ports of Constanta due to high military risks. Moreover, before the war this difference was $1/tonne.
“If you save this $20, it will immediately be used to pay farmers by raising prices for their products,” Horbachev explained.
He also drew attention to the already increased world prices for corn and wheat, the country’s main export crops. As a result, in particular, the cultivation of corn in the 2023 season, from the unprofitable level in October minus $30-40/tonne, “has come close to break-even, to zero.”
Solving logistics problems is quite realistic and Ukraine has the potential to help farmers get at least some profit in the 2023 season, the president of the UGA concluded.
