Status and dynamics of export of Ukraine's agricultural products through the "grain corridor" under the influence of current challenges and dangers

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Taras Shevchenko National University of Kyiv

Status and dynamics of export of Ukraine's agricultural products through the “grain corridor” under the influence of current challenges and dangers

Nazar Didukh PhD Student

Abstract

The instability and uncertainty of the geopolitical development of the world's countries lead to increasing challenges and dangers of modernity, which negatively affect the processes and phenomena taking place in the state and society. The issues of the destabilizing influence of destructive factors have become particularly acute in the conditions of the Russian Federation's full-scale invasion of Ukraine and its active military operations. As a result, the agricultural sector has undergone large-scale destruction, and significant volumes of agricultural products have been blocked and not exported from Ukraine. In the scientific article, the methodological basis of the research is based on general and special methods of economic analysis and scientific knowledge. In particular, the method of systematic analysis, synthesis, scientific abstraction, comparison, generalization and systematization is used. It has been established that a significant positive success in resolving the crisis was achieved by organizing a “grain corridor” through which significant volumes of agricultural products were exported. Their volumes reached 32440 thousand tons as of June 2022, with corn (16802 thousand tons, 51,8%), wheat (8853 thousand tons, 27,3%), meal (1691 thousand tons, 5,18%) and oil (1622 thousand tons, 5,0%) accounting for the largest share. It was found that the largest volumes of exports of agricultural products from Ukraine were delivered to China (7674 thousand tons), Spain (5972 thousand tons) and Turkey (3423 thousand tons). It has been established that Ukraine has a strong export potential of grain crops, which, even in the context of introducing a special legal regime of martial law and in the conditions of active hostilities on Ukrainian territories, is trying to continue to increase it. It has been proven that instability in Ukraine's exports of grain threatens many countries with deepening hunger and aggravating of the global food crisis. The ways to address the issues with Ukraine's agricultural exports are suggested as a means of resolving the crisis. The primary ones are ensuring the unimpeded operation of the “grain corridor”, unblocking seaports and ceasing active hostilities on Ukrainian territory. Ensuring exports via Ukraine's western borders is equally crucial. For this purpose, it is necessary to modernize the logistics infrastructure and optimize the supply chains of agricultural products, as well as to build innovative elevators and transshipment terminals in the border regions of Ukraine.

Keywords: “grain corridor”, export, agricultural sector, agricultural products, foreign trade, grain crops.

Introduction

Problem statement. The full-scale military invasion of the Russian Federation on the territory of Ukraine has caused a significant deepening of the existing problems of ensuring the export of agricultural products, which in recent years has been characterized by growing tendencies of foreign trade between the countries of the world. It is obvious that the agricultural sector of Ukraine has gained significant importance in modern conditions, and economic growth has been driven by the agricultural sector. The growth of the export potential of Ukraine's agricultural sector has made it possible for the country to gradually integrate into the global economic space by producing products that are competitive in the world markets. However, the events of 2022 made significant adjustments to developing export of agricultural products, as a result of which the supply of Ukrainian products became impossible due to the blocking of seaports, mining of large Ukrainian territories and active hostilities in agricultural areas. The outlined trends indicate the relevance of this issue, which requires in-depth research and additional studies.

Analysis of recent studies and publications. The problematic aspects of scientific substantiation and reflection of the status and dynamics of Ukraine's export of agricultural products through the “grain corridor” under the influence of the challenges and dangers of our time are in the spotlight of both scientists and practitioners. In particular, the findings of A. Chub [1, p. 35] are of great importance in this context, who argues that modern globalization processes require new approaches to organizing the principles of functioning of the agricultural sector and strengthening opportunities for entering international agricultural markets. At the same time, O. Radchenko and T. Karadobri [2, p. 85] revealed that Ukraine occupied a leading position in the export of grain crops on a global scale in the pre-war period. However, as noted by Ye. Bielashov [3, p. 1], Russia's full-scale military invasion of Ukraine had an extremely negative impact on the activities of seaports, a significant number of which ceased operations, in particular, Kherson, Skadovsk, Berdiansk and Mariupol. Along with this, others, such as Odesa, Bilhorod-Dnistrovskyi, Mykolaivskyi, Olvia, Chornomorsk and Pivdennyi, are forced to suspend their operations due to the threat of shelling and increased danger of sea freight. The scholar found that seaports accounted for 93,1% of grain exports as of 2021, and the possibilities of reorienting cargo flows to other modes of transport in 2022 are extremely limited. Moreover, in 2022, in addition to the problems outlined, there was a significant increase in the cost of transportation of agricultural products, which, according to some estimates, is 2,5 times higher than in 2021, calling into question the economic feasibility of growing certain types of agricultural products.

Such trends threaten not only Ukraine but the entire world community. After all, according to I. Us and N. Havrylenko [4, p. 1], the threat of global hunger is increasing; and given the reduction in the real value of trade turnover, which as of 2022 amounted to 21,3% of the value of the same period of the previous year, Ukraine may completely lose its position in foreign markets of agricultural products.

It is obvious that at the current stage, the Russian aggression has significant systemic negative impacts on the export of Ukraine's agricultural products. Russia provokes a number of short- and medium-term risks and dangers going beyond the national level and requiring an international response. After all, according to Y. Yakymenko [5, p. 4], Ukraine has established itself as a global player in the markets of agricultural and food products, on which the level of food security in many countries of the world and international social-economic stability significantly depend.

Along with this, A. Drobiazko [6, p. 110] notes that signing the Association Agreement with the European Union obliged Ukraine not only to fulfill its obligations but also to critically evaluate the structure of exports and create incentives to increase the competitiveness of agricultural products in foreign markets.

In a given context, I. Cherniavsky [7, p. 24] states that ensuring high rates of exports of agricultural products by Ukraine requires paying considerable attention to developing the grain subcomplex of the country's agricultural sector.

Thus, considering the significant challenges of ensuring the export of Ukraine's agricultural products in wartime conditions, the necessity to ensure the operation of the “grain corridor” and to ensure the export of products through it is extremely important.

The purpose of the academic paper is to substantiate the theoretical and applied principles of studying the status and dynamics of Ukraine's export of agricultural products through the “grain corridor” under the influence of the challenges and dangers of modernity.

The following objectives should be addressed in order to achieve the research purpose: to analyze the features of Ukraine's export of agricultural products in the conditions of persistent uncertainty and increasing impact of the challenges and dangers of the present time; to analyze the status and dynamics of changes in the export of Ukraine's agricultural products through the “grain corridor”; to suggest the main ways to increase the efficiency of using the “grain corridor” for the purpose of exporting the Ukrainian agricultural products.

Presentation of the main material

The challenges facing Ukraine's agricultural sector, caused by the war and its devastating consequences, have significantly imbalanced the processes of ensuring the export of agricultural products. They have disrupted major supply chains and made it impossible to fulfill contractual obligations. It is obvious that a full-scale invasion of the Russian Federation will have devastating effects on Ukraine's agriculture industry that are estimated by significant indicators. In particular, it is worth noting that unprovoked aggression against civilian shipping in the Black Sea region resulted in the blocking of more than 22 million tons of grain in Ukrainian ports, which was intended for export. grain corridor ukrainian

The significance of the problematic aspects of military nature has led to the threat of increased hunger on a global scale. Therefore, the main efforts were consolidated at the international level to find ways out of the crisis, one of which was the organization of exports of Ukrainian agricultural products through the “grain corridor”.

The studies conducted in this section have made it possible to identify the volume of exports of agricultural products for the period from 01.08.2022 to 28.06.2023, which was carried out through the “grain corridor” (Figure 1). In particular, it should be noted that over the entire period of the grain initiative, 32440 thousand tons of agricultural products have been exported from Ukraine, namely: 16802 thousand tons of corn, 8853 thousand tons of wheat, 305 thousand tons of sunflower and 1622 thousand tons of oil.

Fig. 1. Volumes of export of agricultural products through the “grain corridor” for the period from 01.08.2022 to 28.06.2023, thousand tons

Calculated based on [8; 9]

According to the analysis of the commodity structure of Ukraine's agricultural exports (Figure 2), corn (51,8%), wheat (27,3%), oil (5,0%), and meal (5,2%) account for the largest share. Other types of agricultural products have slightly lower shares.

Fig. 2. Commodity structure of agricultural exports through the “grain corridor” for the period from 01.08.2022 to 28.06.2023, thousand tons

Calculated based on [8; 9]

At the same time, it has been revealed that the largest volumes of agricultural exports are exported to China (7674 thousand tons), Spain (5972 thousand tons), Turkey (3423 thousand tons), Italy (2033 thousand tons), the Netherlands (1717 thousand tons), Egypt (1538 thousand tons) and Bangladesh (1067 thousand tons) (Figure 3). Quite significant but slightly smaller volumes of agricultural products are exported to Israel (881 thousand tons), Portugal (752 thousand tons), Tunisia (661 thousand tons) and Libya (601 thousand tons).

Fig. 3. The countries to which the largest volumes of agricultural exports through the “grain corridor” were exported in the period from 01.08.2022 to 28.06.2023, thousand tons

Calculated based on [8; 9]

Under the assistance of the UN and Turkey, Ukraine and the Russian Federation signed back-to-back trade agreements with the UN on the secure transportation of grain, which allowed for a partial opening of Ukrainian ports and the export of grain from Ukraine to countries around the world. However, the problems of exports have not been fully resolved yet. Moreover, the Russian Federation systematically violates the agreements and restricts the export of agricultural products.

It is obvious that solving the challenges with the export of agricultural products from Ukraine requires further cooperation at the international level. First and foremost, this is based on the cessation of the military conflict between Ukraine and the Russian Federation. However, it will be extremely difficult and impossible to quickly restore pre-war export levels in the coming years.

Conclusions

Thus, the conducted studies of the status and dynamics of Ukraine's export of agricultural products through the “grain corridor” under the influence of the challenges and dangers of modernity give grounds to conclude that the Russian Federation's war in Ukraine is an extremely important destabilizing factor in ensuring Ukraine's export of agricultural products. It has been proven that the decline in the export indicators of Ukraine's agricultural products threatens to deepen hunger on a global scale and a global food crisis. It was found that the export of Ukrainian agricultural products through the “grain corridor” made it possible to partially solve the existing challenges for both Ukraine and the international community. However, despite the positive effect of exporting agricultural products through the “grain corridor”, there are several other directions to ensure the growth of Ukraine's export potential for selling agricultural products to European countries. In particular, it is worth noting that the necessity to increase attention to ensuring exports through Ukraine's western borders is becoming of paramount importance. We deem it necessary to offer suggestions for modernizing the logistics infrastructure and streamlining the agricultural product supply chain in order to maximize the effectiveness of grain exports. Moreover, the construction of cutting-edge elevators and transshipment terminals, which are thought to be crucial to be situated in the regions of Ukraine bordering European nations, will be beneficial.

References

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