Losses from the termination of the Grain Agreement may reach $800 million per month

The National Bank of Ukraine estimated and calculated the decrease in foreign exchange earnings in the event of the closure of the “grain corridor”. Foreign exchange receipts may decrease from 270 to 800 million dollars per month.

Currently, the risk of canceling the Grain Agreement has significantly increased. Additional problems may be provoked by the continuation of the ban on the import of Ukrainian agricultural products by some EU countries, according to the “Inflation Report” of the NBU.

Such a scenario will worsen the prospects of agricultural exports and reduce foreign exchange earnings:

• by 270 million dollars per month – in case of continuation of the ban on food exports to neighboring countries;

• by 290 million dollars per month – in case of non-renewal of the “grain corridor”;

• for 800 million dollars per month – in case of simultaneous effect of both restrictions, taking into account the partial reorientation to alternative ways of supply.

According to the NBU, export restrictions will temporarily reduce food inflation in Ukraine, as supply will increase in the domestic market.

“At the same time, farmers will be forced to reduce crops. In the future, this will negatively affect economic activity and increase the pressure on the exchange rate,” the NBU emphasized.

As previously reported by USM,  the negotiations on the grain agreement were postponed

until next week.