EPA
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NOS News•today, 17:47
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In Ukraine, more than 20 million tons of grain are waiting for export. The agreement concluded yesterday should allow the grain to be transported across the Black Sea to Turkey. There it is checked that no weapons are being smuggled and then the grain can be shipped around the world via the Bosphorus. Countries in Africa and the Middle East in particular depend on Ukrainian agricultural products.
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This morning, Ukraine’s main export port, Odessa, was met by Russian missiles. The attack was immediately condemned internationally and UN Secretary-General Guterres emphasized that all parties must abide by the agreements made. Ukraine’s infrastructure minister says Ukraine continues to prepare for grain exports despite the missile attack.
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Caroline Emmen, director of the Committee of Grain Traders, is shocked by the attack. “We need the confidence that a number of practical things can be completed to get the trade going. The moment you attack the infrastructure, you can ask yourself whether everyone dares to come to the port, trade the goods , and let the ships go. So I really don’t think it’s good news.”
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Prices will fall
If the grain transports get going, that will be good for many parties, says Emmen. “Think of the Ukrainian farmers, but also think of the countries where famine could possibly arise due to a lack of grains. It is also good for the trade itself. More grain becomes available and then the price falls. That is good, because the prices had increased tremendously.”
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For Dutch consumers, this could mean that food, for example, will become a bit cheaper again. But it remains to be seen whether the price of grain, which fell on the stock exchanges yesterday when the agreement was concluded, will remain lower.
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Thijs Geijer, sector economist at ING, says that the decline in grain prices on the financial markets had been going on for some time. This was an advance on the deal closed yesterday. “There was already an expectation in the market that it would succeed.”
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He also expects food prices to fall again. “The producers who purchase grain and vegetable oils can do so for somewhat more favorable prices in the coming period. They will then pass that on. The prices of vegetable oils were already falling a bit.”
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NOS
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Emmen of the Committee of Grain Traders points out that the Netherlands is also a major importer of grain from Ukraine. “The Netherlands is a trading country, a lot of maize, wheat and oilseeds come here. That is traded again via Rotterdam. It will also have an effect here.”
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“What could also affect the price is that Russia is allowed to export more under the grain deal,” she says. “As a result, more raw materials are available worldwide again. The price falls as the supply increases.”
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According to Geijer, people mainly talk about grain, but there is also maize, which is used for animal feed. So it is also a boost for farmers in the Netherlands, because animal feed can become cheaper. And cheaper animal feed may lead to cheaper meat.”
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Safe sailing
Both say that it now comes down to the practical implementation of the agreement. “It’s about ships sailing and that they can sail safely,” says Geijer. “And that the traders have the confidence that it will succeed. The insurance was sky high, but the premiums are now lower, as I understand. This makes it more feasible. A lot will be calculated this weekend and or called whether they can do this going to do.”
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“There are still quite a few challenges,” says Emmen. “The question for traders is whether they can get the goods to their destination. Can it be insured, do I have a boat available, is there a crew who would like to come along? Our expectation is that as soon as one ship is in motion will come, more will follow. We sincerely hope, of course, that those ships will have free passage across the Black Sea.”
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New harvest
For Ukraine, transport is the bottleneck in the process. “It is important that the grain is shipped as soon as possible, because the next harvest has already started, as good as it goes under the current conditions. I understand that 10 percent of the land has already been cleared. There is a lot of pressure on the agriculture to get the grain away, otherwise the new cargo can’t come.”
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First, the ships that are still in Ukrainian ports have to sail away to make way for new ones, he says. “That could already start now, according to the UN. Then you have the proof. The markets will also look closely at this.”
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