Black Sea grain exports are facing new restrictions as record-low water levels on the Danube limit flows through Romania, while an escalation in Russian strikes is leading to Ukrainian grain being diverted from Odesa and other ports, UNN reports, citing Bloomberg.
Details
The publication notes that the Black Sea is the main export channel for Russia and Ukraine, two agricultural nations that account for more than a quarter of global wheat exports. Intensifying attacks by both sides on grain infrastructure and vessels in the region have once again raised concerns about the reliability of supplies from one of the world's most important breadbaskets, adding risk to global food supplies already affected by poor weather.
Following Russia's full-scale invasion in 2022, the Romanian port of Constanța became a critically important alternative route for exporting Ukrainian grain to global markets. Typically, cargo from Ukraine is delivered to the port by rail, road and barges along the Danube. But heat and a lack of rain have led to lower water levels in the river, forcing vessels to carry lighter loads.
This is driving up the cost of river freight, which in turn increases costs and delays for road and rail transport precisely when the Black Sea export corridor needs support. It is also hindering Romania's flows, as the country is a major grain supplier to the European Union, the publication notes.
"Romanian farmers no longer have access to trucks, and transport costs have risen sharply," said Stan Tiberiu-Dan, vice president of the Forum of Professional Farmers and Processors of Romania.
For producers seeking to transport wheat, sunflower and rapeseed downriver toward Constanța, this means fewer barge trips, longer waiting times and higher Danube transport tariffs, which are already above seasonal norms, according to a statement by the Forum of Professional Farmers and Processors of Romania.
"My grain terminal could receive 20% more grain to serve the 'Solidarity Lanes' project with Ukraine," said Viorel Panait, president of the Constanța Port Business Association and CEO of Comvex SA, one of the grain terminal operators. However, the Danube supplies cargo to the terminal, and "the lack of water is affecting the amount of grain coming in."
The "Solidarity Lanes" project was launched by the European Commission in 2022 to create alternative routes for exporting Ukrainian agricultural products besides those through the Black Sea.
The publication notes that Ukraine's state railway operator is also negotiating with neighboring countries to add new export routes and expand grain transportation corridors. However, according to Minister of Agrarian Policy Taras Vysotskyi, rail transport combined with the Danube route can carry only one-third of the capacity of Ukraine's Black Sea ports.
These disruptions are occurring as agricultural markets face an exceptionally strong El Niño phenomenon, as well as rising energy prices and difficulties along trade routes due to tensions in the Middle East. Last month, wheat and corn futures rose sharply in both Paris and Chicago.
"In the absence of a rapid improvement in the situation, whether through a de-escalation of hostilities in the Black Sea or a recovery in the Danube's water level, prices may remain high," said Burak Çetinoğlu, head of Arrow's global research department, a brokerage specializing in shipping and energy.
The logistical strain is likely to intensify in the coming months as Romania prepares for record harvests of wheat, barley and rapeseed. Mild temperatures in the country delayed the corn harvest in the main producing regions, causing those supplies to coincide with the latest wheat flows.
Together with the need to redirect grain supplies from Ukraine after losing approximately one-third of its export capacity on the Black Sea, this means increased volumes competing for the same trucks, railways and river barges.
"Since 2022, Constanta’s role has been to act as a kind of safety valve—when Odesa comes under attack, cargo is routed westward and through Romania. This presupposes having a reserve of cargo in the corridor serving Constanta. But that is not the case," said Adrian Dobrita, head of trading at RWA Raiffeisen Agro Romania.