Ukraine. Prospects for cereal exports through Danube ports in 2024

Until 2022, the Danube region facilities were hardly used for agricultural exports due to the lack of deep-water ports and their remoteness from the main grain-growing regions. The situation changed radically after the start of the war and the Danube ports became an indispensable logistical channel for Ukrainian agricultural exports.

Will their role be as important in 2024? 

According to the Ukrainian Sea Ports Authority, 23 new terminals and 20 new transshipment points were opened in the Danube region in 11 months of 2023. Most of these are grain-handling projects – small terminals with storage facilities and conveyors for loading onto ships. All of these projects are far from the scale of the terminals in Odesa or Mykolaiv, which makes the medium- and long-term prospects of such projects much more challenging.

Ongoing drone attacks are not helping investor confidence either. Since 18 July, 105 port infrastructure facilities have been attacked in all Ukrainian ports, including the smaller Danube ports. Due to the military risks, Nibulon has even suspended the flour-milling project at the Bessarabian branch.

After the opening of the new temporary sea corridor and the start of grain shipments through the ports of Big Odesa, the demand for grain exports via the Danube is gradually decreasing, which is quite obvious given the significant difference in logistics costs. In some cases, logistics costs, including transshipment, can be twice as high as for exports via Odesa. Ukrainian grain corridor functioning is also bringing positive changes on the Danube, as the queues of barges and wagons with grain have decreased significantly in recent months.