Demand for grain exports via the Danube is falling

Due to the increase in the frequency of shelling from the Russian side, the Danube ports are becoming illiquid for the sale of grain.

As a result of Russian shelling of the port infrastructure, the storage of grain in local warehouses becomes extremely risky. As a result, the shipment of wheat for export switches to direct transshipment. At the same time, port attacks increase freight costs. Accordingly, exports by sea become less profitable compared to land supplies, writes UAC.

“Currently, the potential of the Danube ports is unrealized, which is caused by the bombing of the port infrastructure and the destruction of local warehouses – traders do not risk dealing with grain storage, and direct transshipment takes more time than shipping from warehouses. Therefore, there is a risk of overstocking,” the report says.

During the first 4 days of September, wheat exports amounted to about 100,000 tons. These are mainly road and rail shipments. Most of the grain carriers go to Constanta, and no more than 30% of agricultural products are exported from Ukrainian ports.

As of September 1, wheat reserves amount to 22 million tons. Ukraine could export 3 million tons of grain every month through the Danube ports, but now it is impossible to export such volumes. Constant growth of freight costs and reluctance to fill warehouses make the Danube an illiquid sales channel.

Currently, the minimum conditional price for fodder wheat in the Danube ports is $140 per ton. The maximum price is in the range of 150-154 dollars per ton. Prices on terms of DAP Romania is about 220 dollars per ton.