Embattled Ukrainian farmers run on empty as world faces food crisis

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  • More than 20 million tonnes of grain stuck in silos
  • Farmers wait weeks for diesel deliveries
  • Ukraine seeks alternative export routes as ports are blocked

PARIS/LONDON, May 25 (Reuters) – After navigating through the spring planting season, sometimes with the help of bulletproof vests and helmets, Ukrainian farmers face another challenge: finding enough diesel for the upcoming harvest.

The war with Russia has cut fuel supplies as farmers have stepped up work for the spring season and they have lost around 85% of their normal supplies since the conflict began on February 24, farmers say. fuel distributors and analysts.

The total area sown to cereals this spring is already expected to be up to 30% lower than last year due to the fighting, and yields could also drop if farmers do not get fuel to be able to apply chemicals. and harvest crops at the right time. .

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Ukraine was the world’s fourth largest grain exporter last season, shipping staples such as wheat and maize to Africa and the Middle East, as well as half of the grain purchased by the United Nations World Food Program United for emergency aid.

With Ukraine’s Black Sea ports blocked, crop extraction is fast becoming a global problem and UN Secretary General Antonio Guterres is trying to broker a deal to get grain shipments back on track – and calm. global food markets. Read more

In the year ending at the end of June 2021, Ukraine exported 45 million tons of grain. It was expected to hit 65 million after a record harvest late last year, but the war has left some 21 million tonnes stuck in silos in territory it controls as the 2021 season /22 ends next month.

And while security has been the most pressing issue for farmers so far, with swaths of land cut off by Russian advances or damaged by bombardment, fuel shortages are starting to be felt as they approach the next harvest. Read more

“Fuel is the biggest issue right now, more than anything,” said Kees Huizinga, a Dutch national who runs a 15,000-hectare dairy and agricultural farm in central Ukraine.

SERIOUS SHORTAGES

Ukrainian farmers use most of the 1.5 million tonnes of diesel they consume each year, more than 10% of Ukraine’s annual fuel demand, in the spring, said Taras Panasiuk, commercial director of service station operator WOG.

Ukraine generally depends on Russia, Belarus and imports from elsewhere by sea for most of its fuel. Last year, for example, more than 60% of its diesel came from Russia and Belarus, estimates Ukrainian oil products consultancy A-95.

Today, Ukraine has been forced to embark on costly and complex means of bringing fuel overland from neighbors such as Poland and Romania, although a lack of capacity and bureaucracy have slowed these efforts, said the Ukrainian Oil and Gas Association.

That task has become more daunting as neighboring countries grapple with their own diesel shortages, while Russian strikes on the Kremenchuk oil refinery and fuel depots have further reduced supply in Ukraine.

A shortage of tanker drivers is also hampering fuel deliveries, as many have been drafted into combat, analysts say.

Roman Gorobets, director of FE Astra, which farms around 2,000 hectares in the central Poltava region, said waiting times for diesel deliveries to farms were now two to four weeks.

“Things have gotten worse. We are facing severe fuel shortages across the country,” he said.

The government has announced contracts to import 300,000 tons of diesel and 120,000 tons of gasoline to cover the month of May, and the deputy chief of staff for the Ukrainian presidency, Kyrylo Tymoshenko, said on Friday that 1,500 tons of fuel had reached a customs point in Lviv in the previous 24 hours.

As with other key materials such as seeds and fertilizers, farmers have so far largely met their fuel needs by using stocks and tapping into alternative supply chains, farmers say.

CULTURAL CHANGE

Farms have also adjusted their cultivation plans. Notably, they have moved away from maize because it is intensive to grow and can produce bumper crops that could overwhelm Ukraine’s already overflowing grain silos. Read more

Instead, they opt more for barley, soybeans and sunflower seeds, as they are cheaper crops to grow and generate smaller volumes when harvested.

Based on remaining stocks from last year’s harvest and current monthly exports of around 1-1.5 million tonnes overland, only 65% ​​of normal grain storage capacity will be available in July, when the winter crops begin to be harvested.

Some growers like Gorobets, whose company completed spring sowing in mid-May, say the inability to sell the next crop is the biggest threat to Ukrainian agriculture and the global food market.

A shortage of diesel for tractors could still hamper the rest of the growing season if the conflict drags on.

“If you can get seeds, fertilizer, whatever chemicals you need, it’s kind of a one-time thing. Fuel is more stable, you need it all the time,” Matt said. Ammermann, commodity risk manager at StoneX, which covers Eastern Europe.

Huizinga says his dairy and agricultural farm in central Ukraine has enough fuel to finish planting, but not to cover the harvest that will begin in a few months.

Like other wartime factors, the potential impact of fuel shortages on agricultural production is difficult to predict, and the Ukrainian government has not given forecasts of harvest volumes.

For wheat, mainly planted before the war as a winter crop, some analysts tentatively expect that the loss of land due to the conflict and a squeeze on supplies, from fertilizers to fuel, will reduce production by 35 to 40 % compared to a record harvest of 32 million tonnes in 2021. .

Even with a drop of this magnitude, there would still be around 20 million tonnes to be threshed and transported from July.

With timing so important to agriculture, fuel to power machinery can be a determining factor, said Mike Lee, director of Green Square Agro Consulting, which specializes in crop analysis in the Black Sea region.

“If you don’t have diesel, you can’t drive a tractor, no matter how much fertilizer and seed you have.”

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Reporting by Gus Trompiz in Paris, Bozorgmehr Sharafedin and Maytaal Angel in London, Pavel Polityuk in Kyiv and Christopher Walljasper in Chicago; Editing by Veronica Brown and David Clarke

Our standards: The Thomson Reuters Trust Principles.

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