Back in Business: Ukraine Exports 6.6 Million Tons of Grain in April 24
The surge in exports reaches its peak since Putin’s invasion.
Imagine a world teetering on the brink of food insecurity. A war, fueled by aggression and ambition, disrupts the flow of essential grains from a major global supplier. This isn’t a dystopian future, but the harsh reality for Ukraine, a country battling not only for its land but for its economic lifeline.
The European Union currently has 157 million hectares dedicated to agricultural production. If integrated with the EU; Ukraine, with its 41.3 million hectares of agricultural land, would increase the EU’s agricultural area by a substantial 27%.
Just one country.
A significant 68.5% of Ukraine’s total land area is dedicated to agriculture.
The Russians were keenly aware of Ukraine’s agricultural significance. Their early actions in the war demonstrate a calculated strategy aimed at crippling Ukraine’s agricultural sector to exert control over the country.
In the early days of the Ukraine invasion, a dairy farm named Agromol, located near Kharkiv, was targeted by the Russian armed forces. Kharkiv sits just 30 miles from the Russian border and faced some of the earliest attacks. The Agromol farm was less than a mile from a major road leading directly into the city, making it a strategic target.
But a review by Center for Strategic and International Studies showed that this wasn’t accidental damage from nearby fighting:
Satellite imagery acquired on April 15, 2022, and video evidence from March 31, 2022, suggest a deliberate attack on a major agricultural production facility. Surrounding residential areas do not appear to have suffered damages, indicating that the farm was intentionally targeted by Russian forces.
Given Russia’s use of hunger as a weapon against civilians in Mariupol and the direct route of transportation between Kharkiv and the Agromol dairy farm, it is possible that Russian forces targeted the farm to limit the availability of food to civilians in Kharkiv at they attempted to capture the city.
The Russian armed forces targeted the port infrastructure in the Odesa region a staggering 39 times since the beginning of the war. This relentless assault on just one sector underscores the significant resources and effort the Russians were willing to expend to dismantle the port facilities.
This wasn’t an accident. It was a deliberate attempt to destroy Ukraine’s ability to produce and export that produce.
The cumulative damages inflicted by the Russians on Ukraine’s agricultural sector amount to a staggering $80 billion. This number serves as a compelling evidence that Ukraine’s agricultural industry, along with its ports and cargo ships, were prime targets for Russian aggression.
The Russian armed forces divided the responsibility for attacking Ukraine’s agricultural assets. Fighter jets and long-range missiles targeted these assets from the air, while the Black Sea Fleet blockaded Ukrainian ports, joining the aerial bombardment alongside their air-force counterparts.
Bit by bit, Ukrainian escalated its counter-attacks on Crimea. What began as isolated incidents on the western edge of the Black Sea escalated to bold strikes in the far eastern regions. Gradually, the operational space for the Russian Black Sea fleet was constricted. This strategic pressure paved the way for the creation of a safe mari-time corridor, allowing cargo ships to move in and out of Ukrainian ports.
Bulgaria, Romania, and Turkey, the countries around the Black Sea, have teamed up to create a Mine Countermeasures Naval Group. Together, they’re working to clear the Black Sea of mines, making sure shipping routes stay safe and clear.
In April 2024, shipments of Ukrainian grain and other products through the Black Sea corridor surged to 5.2 million tonnes, marking a record high since the war began. Ukraine also achieved a new monthly export record, with total grain and oilseed exports reaching 6.6 million tonnes, the highest in years.
This is good news, but a note of caution is needed. Some news outlets write about this record breaking flow of export as if Ukraine’s production capacity has returned to pre-war levels. While this would be ideal, unfortunately, reaching those levels will be extremely difficult, if not impossible, until the war ends.
Putin’s forces have occupied approximately 20% of Ukrainian territory, wreaking havoc with widespread destruction and mining of countless farms.
According to a briefing given to the European Parliament,
- “Russia’s deliberate destruction of the Kakhovka Dam on 6 June 2023 resulted in the catastrophic flooding of 620 km² of land.
- Before its destruction, the Kakhovka Dam fed an irrigation network of up to 800 000 hectares in one of Ukraine’s most fertile and sunniest regions, over 300 000 of which will now depend on uncertain rain-fed irrigation, resulting in productivity losses of up to 70 %”.
Land within 40 to 60 kilometers from the line of contact betweenUkraine and the invaders is rendered unusable, severely impacting Ukraine’s ability to return to pre-war production levels despite their efforts.
Ukraine’s export volumes have exceeded pre-war levels since the removal of the naval blockade imposed by the Russian Black Sea Fleet, which previously hindered the flow of Ukrainian products. Currently, Ukraine is clearing the backlog of goods stored during the blockade.
Given the pace at which they are moving these previously blocked goods, it’s likely that we’ll soon see a decline in future export volumes.
Why?…
Due to reduced farmland and the destruction of production facilities.
Undoubtedly, this setback is significant, and Ukraine’s ability to address it hinges on the end of the war. Once the invaders are expelled, Ukraine can aspire to reclaim pre-war production levels, and with support, even surpass them.
However, Ukrainians are not passively watching their situation deteriorate. Data from the United States Department of Agriculture (USDA) indicates that Ukraine produced 33 million metric tons of wheat in the 2021/2022 period (a two-year aggregate). Projections for 2023/2024 suggest a decrease to 23.4 million metric tons.
Similarly, corn production decreased from 42.13 million metric tons in 2021/2022 to 29.50 million metric tons in 2023/2024.
Before I started digging for this story, I believed Putin invaded Ukraine to revive the Soviet empire, seeing Ukraine’s control as crucial to dividing Europe. I thought he used military conflicts to divert attention from internal governance problems and corruption. Both are true. But I did not think Ukraine’s agricultural resources would have played a critical role in Putin’s decision to invade.
The abundant agricultural production of Ukraine represents a significant opportunity for the corrupt Russian government, which struggles to improve the lives of its citizens. If Ukraine were to be fully annexed, Russia’s wheat production capacity would soar from 92 million metric tons to 123 million metric tons, providing a substantial economic advantage.
The scenario is similar with other agricultural products such as sunflower oil, barley, and maize. The potential annexation of Ukraine would amount to one of the largest thefts in history, orchestrated by the Russian government.
Fortunately, Ukraine resisted, compelling Putin into a two-and-a-half-year standoff to protect his throne.
In 2021, Ukraine’s total export value reached $65.87 billion. It’s likely they’ll approach or even surpass that figure this year.
To maintain this momentum, it’s crucial for Ukraine to counter the Russian Black Sea fleet. Equipping Ukraine with long-range missiles will be essential to keep Crimea out of reach for the fleet. The arrival of F16s will significantly enhance Ukraine’s maritime security capabilities.
Ukraine’s economy is on the rise, as is Russia’s.
However, only one of these nations has a sustainable future. Ukraine’s economic growth stems from the resumption of its agricultural exports to global markets after a temporary pause. In contrast, Russia’s economic growth relies heavily on Putin’s continual escalation of defense and security spending.
Putin is spending 8% of the nation’s GDP on defense and security. That is the number they are giving, which means the real number would he a little higher.
The growth in Russia’s economy is unsustainable because Putin is withdrawing funds from the nation’s savings, redirecting them to defense manufacturers. His savings is a finite number.
Russia’s economic growth isn’t driven by increased productivity.
Consider wheat production as an example. In the 2022/2023 period, Russia produced 92 million metric tons of wheat. However, one year later, their production slightly decreased to 91.5 million metric tons. This stagnation indicates that Russia is not increasing its wheat production.
They can’t produce more.
Can they?
In 2023, the Russian economy faced a shortfall of nearly 5 million workers. Putin may add another few million to this figure in the current year. The lobor shortage is killing the economy month by month.
In 2021, Russia’s workforce numbered around 72 million.
What is the percentage of 7 million hands?
10%.
10 freaking percent.
This monumental capacity loss is already significantly impacting all aspects of the Russian state. While the economy may not immediately reflect this decline, Putin’s strategy of withdrawing funds from savings to cover it up is unsustainable. This temporary fix cannot continue indefinitely.
In stark contrast, Ukraine may have lost significant territory. While this loss will result in a decline in export volume, Ukraine has the opportunity to tightly integrate its economy with the European Union. By striking favorable trade deals with individual nations, and with the assistance of the West, Ukraine can bolster its export industry. This collaboration has the potential to fuel Ukraine’s growth year after year.
This opportunity stands as one of the low-hanging fruits before us, and it’s within reach.
However, I harbor doubts about the Western world’s reaction when Putin eventually surrenders. My confidence in their commitment to doing the right thing by Ukraine has diminished somewhat. I hope they won’t resort to threatening Ukraine to appease Putin, as they are more than capable of doing so.
Accept the deal or we won’t support you.. It is possible. We cannot rule that out.
The responsibility will largely fall on the Baltic states, Poland, Britain, and France to prevent such a scenario from unfolding. Public awareness and opinion on this issue will also play a crucial role in shaping the response of the western coalition.
So, I’m unsure how things will unfold after Putin waves the white flag. But I’m one hundred percent confident that Ukraine’s economy will keep growing. They need to keep pushing forward, keep earning more, and invest in their own weapons and agricultural production capacity.
And keep the Russian Black Sea fleet as their top priority.
This story is accessible to all, free for non-Medium users. Feel free to share it with anyone.
