Ukraine grain deal won't fix warzone logistics, top producer says

MHP SE

14/07/2022 15:08

By Karin Strohecker
    LONDON, July 14 (Reuters) - A deal to restart exports of
Ukrainian grain through its deep sea ports could be a game
changer, the chairman of Ukraine's top food producer MHP said on
Thursday, but he warned that getting produce to export terminals
still presents major challenges. 
    The war in Ukraine has caused a surge in global prices for
grains, cooking oils, fuel and fertilizer, with Russia's
blockade of sea ports leaving dozens of ships stranded and some
20 million tonnes of grain stuck in silos at Odessa.
    Russia, Ukraine, Turkey and the United Nations are due to
sign a deal next week aimed at resuming Ukraine's Black Sea
grain exports, following talks in Istanbul.  urn:newsml:reuters.com:*:nL1N2YU0IN
    While the potential agreement was positive, execution will
be challenging, with ports needing to be de-mined and
infrastructure damaged in Mykolaiv and Odessa, MHP chairman John
Rich  MHPCq.L  told Reuters in an interview.   
    "We still have to ship the grain to the ports, and
infrastructure is difficult, we still have to do so under fire -
Mykolaiv and Odessa have been hit by missiles in the past 72
hours," Rich said.
    "I think we (can expect) a fair bit of time and water under
the bridge before we can have confidence this is going to solve
the problem in the short-term. Medium-term maybe it can relieve
things, but I think we have (to play a) waiting game."    
    Ukraine and Russia are major global wheat suppliers, and
Russia is also a large fertilizer exporter. Ukraine is a
significant producer of corn and sunflower oil.
    Speaking about Ukrainian grain, Rich said he expected the
country to produce more than originally anticipated. The winter
harvest is expected to bring in 30 million tonnes, two-thirds
wheat and the rest rapeseed and barley. 
    Summer grains production could be around 38 million tonnes. 
    "The plus is that we are growing the grains, but I can't get
it out of the country in our own operations, let alone Ukraine
generally," said Rich. 
    Grain exports must move soon and free up brimming storage
facilities to enable planning for the next season's crop, Rich
said. 
    "If Odessa does not open, do we plant in September? That
decision has to be made." 

 (Reporting by Karin Strohecker, Sujata Rao and Nigel Hunt in
London; Editing by Frank Jack Daniel)
 ((karin.strohecker@thomsonreuters.com; +442075427262; Reuters
Messaging: karin.strohecker.reuters.com@reuters.net))