Ukraine. Logistics Costs and Early 2023/24 Season’ Trends. Supply Chains Keep Modifications

Early cereal and rapeseed harvesting is in full swing in Ukraine, by July 13, more than 2.2 M mt of wheat, barley and rapeseed have already been harvested. Under the pressure of growing supply, the demand for logistics and freight costs are revised upward.

Railway tariffs

The work of the grain corridor remains on the verge of stopping. According to the UN, during July 1-14, only 7 ships left the ports of Big Odesa for export. The number of wagons with grain moving towards Odessa is also decreasing. As of July 13, 442 wagons were sent to the deep-sea ports of Ukraine, 46% less than as of July 6. The total waiting time for grain wagons unloading is now only 2.5 days. The railway tariff from the north of Ukraine to the ports of Big Odesa has declined to USD 22-24/mt (though not so impressively from the previous USD23-25).

Significant queue of wagons is now near the Danube port of Izmail. As of July 13, 1,921 grain wagons were moving in the direction of the port. Over the last week, the queue has decreased by only 5%, anyway with the current unloading rate, the waiting time in the queue will increase up to 18 days.

The Moldovan Railways finally agreed to provide a discount of 27% to the existing tariffs for the transit transportation of Ukrainian agricultural products through the territory of Moldova in the direction of the ports of Reni, Giurgiulesti and Galati. This most likely will make the port of Reni more competitive among other Danube ports of Ukraine.

Truck exports

On July 1-12, 82,000 tons of agricultural products were exported by road transport, which is 16 K mt more than in the same period in June (the last months of 2022/23 season). Last June exports by vehicles were not so much demanded, but UkrAgroConsult expects an intensification of shipments by vehicles due to rapeseed harvesting with possible exports to EU countries. Exporters are also waiting for the lifting of the import ban to Poland from September 15, although the parliamentary elections in this country will be in October 2023.