By Bogdan Todasca
Russia’s invasion of Ukraine in February 2022 trapped approximately 20 million tonnes of grain in Ukrainian ports. Given Ukraine’s critical role both as a major producer and exporter of key agricultural products, global food supply chains faced immense pressure and food prices soared. As a result, a series of measures were taken to alleviate the impact of Russian blockages on Ukrainian grain exports. In May 2022, the European Commission (EC) launched the Solidarity Lanes Action Plan to establish alternative logistics routes. A month later, the EU lifted tariffs on imports from Ukraine for twelve months, with the moratorium being extended for an additional year in April 2023.
Benefiting from the Dnipro river, which cuts through the middle of the country and stretches to key ports that facilitate access to the Black Sea and the rest of the world, Ukraine has relied heavily on exporting its grains by sea or river. Despite Russia’s suppression of Ukraine’s maritime trade routes, moving goods out of the country by rail was not as feasible due to greater costs, a relatively underdeveloped rail infrastructure and rail gauge differences that impede connections with the EU’s railway network.
To ease Russia’s stranglehold on Ukrainian exports, the Black Sea Grain Initiative was launched on July 22, 2022. Brokered by the United Nations and Turkey, the deal enabled Ukraine to resume shipments of millions of metric tonnes of grains through the Black Sea, while also facilitating exports of Russian food and fertilisers. Bulgaria and Romania were the only two countries in Southeast Europe (SEE) to be cargo destinations for Ukrainian grains, with the former receiving 68,836 tonnes and the latter 285,096 tonnes.
The cumulative effect of the newly established trade routes led to a gradual decrease of global food prices, including those of cereals. Despite several attempts to negotiate a further extension, the Black Sea Grain Initiative was not renewed after July 17, 2023. Russia has also shifted part of its military efforts away from attempts to cripple Ukraine’s energy infrastructure towards targeting ports and grain storage facilities. This change poses a severe threat to both Ukraine’s domestic food supply and the country’s standing as a major international trade partner.
Following the implementation of the Black Sea Grain Initiative, farmers in several SEE and Central and Eastern European (CEE) countries voiced their discontent with the increased influx of Ukrainian grain, which has led to logistical bottlenecks and weakened their ability to remain competitive on local markets. In response, the European Commission suspended imports of Ukrainian wheat, maize, rapeseed and sunflower seed into Bulgaria, Romania, Hungary, Poland and Slovakia until September 15, 2023.
An X-ray of grain trade in SEE
The inflow of Ukrainian grain into SEE has soared in lockstep with the launch of the Black Sea Grain initiative and the creation of additional logistics routes. In the three years prior to Russia’s invasion, Bulgaria, Moldova and Romania were the main SEE destinations for Ukrainian grain, but the war has led to an exponential uptick in most of the region.
With respect to imports of the four key crops that have been subject to temporary suspensions in five CEE countries, Romania’s imports of those crops from Ukraine saw the sharpest climb in the SEE region. In 2022, wheat imports from Ukraine surged to 505,442 tonnes, from a cumulative imported quantity of just 338 kg in the three years leading up to the war. Maize imports from Ukraine recorded the secondhighest upswing after soaring to 745,968 tonnes in 2022 – roughly 585 times higher than the cumulative quantity imported during 2019-2021. Following a 65-fold increase, sunflower imports reached 359,183 tonnes in 2022, while rapeseed imports jumped almost 60 times to 320,835 tonnes.
In the three-year period preceding the war, wheat and maize imports from Ukraine amounted to insignificant fractions of Romania’s total imports of these grains. However, in 2022, Ukrainian wheat accounted for 48.2% of Romania’s total wheat imports and Ukrainian maize made up 55.7% of overall maize imports. Rapeseed imports from Ukraine, which had a meagre 2.2% share in Romania’s total rapeseed imports during 2019-2021, cut an 80.6% share in 2022. Sunflower imports from Ukraine surged to 54.9% from just 0.7%.
In Bulgaria, maize imports from Ukraine recorded the steepest climb of the four crops in 2022, soaring almost 27 times compared to the 2019-2021 period to reach 17,255 tonnes. Wheat imports from Ukraine recorded close to a five-fold jump to 19,695 tonnes, while sunflower imports quadrupled to 943,402 tonnes. Rapeseed imports from Ukraine amounted to 30,658 tonnes in 2022 after falling 10.9% from the total quantity imported in the three years that preceded the war. In contrast to 2021, however, Bulgaria’s rapeseed imports from Ukraine jumped by 42.1%. As a share of the total imports for each of the four crops in review, Ukrainian rapeseed rose from 24.1% in 2019-2021, to 85% in 2022, sunflower increased from 10.8% to 70.5%, wheat from 3.1% to 35.3%, and maize from 0.4% to 18%.
Last year, Ukraine also became a significant trade partner for Croatia and Slovenia, marking a significant change of pace from the three-year period that preceded the war, when trading in the four crops was virtually non-existent. Croatia’s maize imports from Ukraine reached 46,102 tonnes in 2022, skyrocketing from only 131.7 tonnes in the 2019-2021 period. After no recorded imports of Ukrainian sunflower and rapeseed in the three years prior to the war, these rose to 14,506 tonnes and 663 tonnes, respectively, in 2022. Ukrainian wheat, on the other hand, did not find its way into Croatia’s granaries between 2019 and 2022. Ukraine was the source of 39.7% of Croatia’s maize imports in 2022, compared to a share of 0.1% in 2019-2021. Ukrainian sunflower made up 29.1% of all sunflower imports into Croatia during 2022, while rapeseed sliced a 5.1% share in the country’s total imports of that crop.
Slovenia’s grain trade dynamics with Ukraine was similar to Croatia’s, with maize imports swiftly accelerating in 2022, while sunflower and rapeseed imports going from being absent in the three years prior to the war to making significant contributions in the overall trade landscape. Maize imports from Ukraine rose over fivefold to 199,051 tonnes in 2022, compared to the total quantity imported in 2019-2021. Sunflower imports from Ukraine totalled 726 tonnes, while Ukrainian rapeseed trailed closely behind, at 719 tonnes. Slovenia was also the recipient of 26,805 tonnes of Ukrainian wheat in 2022 – 5.6% of the country’s total wheat imports that year. After three years of absence from Slovenia’s import mix, Ukrainian rapeseed and sunflower made up 88.6% and 25.4% of the country’s total imports in 2022. Maize imports galloped from a share of just 1.8% in total maize imports in 2019-2021, to 28% in 2022.
In Moldova, Ukraine’s role as a major trade partner continued to grow further in the months following the Russian invasion. Despite recording the lowest quantity among the four crops in 2022, rapeseed imports from Ukraine saw the fastest acceleration compared to the total value recorded from 2019 to 2021 – a 664-fold jump to 9,298 tonnes. This amount constituted a staggering 97.3% of Moldova’s total rapeseed imports in 2022, jumping from a share of just 2.2% in the cumulative quantity imported in the three years prior to the war.
Sunflower imports from Ukraine came in at the largest volume in 2022, of 87,091 tonnes, growing over 25 times. Ukrainian sunflower made up 95.7% of Moldova’s total sunflower imports in 2022, compared to a share of 24.2% in 2019-2021. The quantity of Ukrainian maize imported into Moldova reached 74,884 tonnes in 2022, growing 14.5 times compared to the 2019-2021 period. While Ukraine accounted for delivering 11.2% of Moldova’s maize imports in 2019-2021, in 2022 its share rose to to 93%. Moldova’s wheat imports from Ukraine climbed at a relatively slower place compared to other crops in 2022, as they had already made up 74.7% of Moldova’s total wheat imports from 2019 to 2021. Thus, in 2022, imports of Ukrainian wheat saw close to a five-fold increase to 24,673 tonnes, or 98.4% of Moldova’s total wheat imports.