This year, Ukraine’s logistics capacity will exceed the actual export volume of agricultural products several times over. Thanks to the Armed Forces of Ukraine, the Ukrainian corridor, which accounts for about 80% of export shipments, is operating steadily. Additionally, there are no barriers to transporting agricultural products by land or through the Danube ports. Moreover, over the past year, many companies, including those supported by donor programs, have expanded their fleet of grain railcars, which will also help reduce domestic transportation costs.

The significant reduction in export shipments compared to previous years is forcing the logistics market to adapt. As a result, logistics costs will be significantly lower this year, allowing agricultural producers to receive fairer and better prices for their products. Overall, the cost of logistics is expected to be around 10-15%.

Freight rates have now stabilized and even dropped to seasonal lows, and this is an opportunity to be seized. It is advisable to lock in freight rates for the longest period possible during this low-price period to cover your logistics needs. Considering that the current prices are at their lowest before the export season of late grains, agricultural producers are contracting logistics up to the spring of 2025. This practice is widely used in Europe. It allows producers to stabilize their sales economics and ensures they do not face logistical disruptions or crises.

In the future, rising prices for agricultural products will lead to increased market activity and, consequently, higher freight rates.

This year, we will see a slowdown in export rates. For example, corn exports will decrease by 11 million tons compared to last year. Corn requires the highest investment per hectare among all crops, and the area under this crop has decreased almost fourfold as agricultural producers, facing certain risks, have favored crops with lower production costs. Therefore, the export potential for corn this year is expected to be 18.5 million tons (last year, it was 29.5 million tons). However, there will still be plenty of demand for Ukrainian corn.

I believe that China, despite its policy of supporting domestic producers, will remain an attractive market for Ukrainian corn exporters. Recently, China has also strengthened trade relations with Argentina and Brazil.

Additionally, our grain will be in demand in North Africa, Western Europe, Turkey, and the Middle East, despite risks in the Red Sea.

Considering that Turkey has imposed temporary restrictions on the import of wheat and oilseeds, this, in addition to seasonal factors, affects prices. For example, the price of wheat, which will see a decrease in exports by 3 million tons this year, has dropped by nearly $20/ton towards Black Sea ports. Of course, if Turkey’s import policy were more open, there wouldn’t be such a significant price drop. However, starting in October, wheat prices are expected to gradually rise once the harvest is collected in the Northern Hemisphere, which accounts for about 60% of global wheat production.

Compared to the 2023/24 marketing year, rapeseed production has decreased by 21% this year. However, there are no issues with exporting this oilseed — Ukraine exports 80-90% of its rapeseed to EU countries every year, benefiting from the shortest logistical route.

However, things are not as favorable for soybean exports to the EU, with Ukraine’s share not exceeding 10%. The majority of soybeans exported to the EU come from Brazil, South America, and the USA.

The lack of legislation on GMO soybean production, which is still widely grown in Ukraine despite being banned, prevents us from increasing our share of soybean exports to the EU. By delaying the resolution of this issue, our country is putting itself at a disadvantage. Moreover, starting January 1, 2025, it will be impossible to import even a ton of soybeans into the EU without traceability from the field and confirmation that there was no deforestation or wetland drainage on that land. Soybeans and their products must have the necessary certifications. Therefore, this will be a barrier to increasing soybean exports to Europe in the near future. It is essential to accelerate the harmonization of legislation with the EU so that when Ukraine becomes a full member of the European community, it operates under the common European rules.

For now, alternative markets for Ukrainian soybeans outside Europe will include China, North Africa, Turkey, and others.