Conflict in the Middle East could create a grain surplus in Ukraine - expert

The escalation in the Middle East has once again highlighted a vulnerable point in Ukrainian agricultural exports: dependence on uninterrupted logistics and stable sea routes. For Ukraine, which sells a significant portion of its harvest abroad and critically needs foreign currency earnings, any "bottleneck" on global routes immediately turns into an economic risk, warned Deputy Head of the Ukrainian Agrarian Council Denys Marchuk during a briefing on March 11, UNN reports.

The expert directly links the escalation with potential complications for trade.

We see that the (Hormuz, - ed.) Strait is closed, meaning we cannot export from there and cannot import products there.

And he explains that in practice, this means not only delivery delays but also a domino effect for contracts: delivery times increase, freight and insurance become more expensive, and uncertainty grows for traders and producers.

The key problem here is not even the fact of temporary disruptions, but the fact that they redraw the usual "sales map."

Ukraine sells about more than five million tons of grain crops annually in directions that depend on the stability of international routes. If the restrictions drag on, the logical consequence will be an internal surplus. We must understand that a certain surplus will appear inside Ukraine.

Surplus within the country: what does it mean for prices and the market?

The emergence of a surplus is quite unpleasant news for farmers, as it entails pressure on procurement prices, more difficult sales, and risks to the liquidity of farms (especially on the eve of active field work).

In such a situation, the producer begins to save on everything that does not yield quick results, and this already affects the productivity of future seasons.

Therefore, Denys Marchuk emphasizes that in the event of prolonged logistical turbulence, the agricultural sector will be forced to quickly reformat the geography of sales.

We will need to think about which markets to direct our products to.

However, the good news in this situation is that global competition still creates demand.

"Competition in the world generates a certain demand, and we, accordingly, will be able to diversify," the expert clarifies.

Market diversification: Asia, Africa, Europe, and the role of foreign currency earnings

Denys Marchenko assures: alternative sales markets should be sought in several directions at once. Because grain exports are currently playing the role of a cornerstone economic support for Ukraine.

"For us, exports are key in terms of ensuring foreign currency earnings," says the deputy head of the UAC and provides specific figures, "in 2025, Ukraine exported agricultural products worth $22.4 billion, and these revenues significantly help the country's economy."

Accordingly, any decline in exports will mean not only problems for farmers and traders but will also have a broader effect on the balance of payments and exchange rate expectations.

Non-traditional agricultural crops in Ukraine: experiment or mass trend?

Against the backdrop of climate change and unstable external markets, the idea of re-sowing the country with something new regularly arises.

Marchuk admits: farmers have been experimenting with crops for a long time, but cautiously and selectively.

Everyone experiments in their own field, allocating certain small areas, in particular, they try chickpeas. An important nuance: these niche crops are small shares, they are more focused on domestic consumption, and this is not a mass story.

That is, it is more about adaptation at the farm level than about a structural change in agricultural production in the nearest sowing season.

Organics as a bet on margin: a slow but logical trend in the agricultural market

The most economically rational direction for Ukrainian farmers may be organic production.

According to Denys Marchuk, many are already starting to think about organic products, which are in demand in Europe.

Here, the price position is many times higher than the general raw materials we export. Interest is growing, but not radically.

The main reason is that "organics" require time, certification, stable supply chains, and investment in technology.

Thus, the conflict in the Middle East for Ukraine is manifested not only in the sphere of foreign policy but also becomes a kind of test of the stability of the agricultural sector's export model. The closure of key sea hubs increases logistics costs, threatens a surplus within the country, and forces a faster search for alternative markets. In parallel, farmers continue cautious adaptation to climate change through niche crops, and also look at organics as a way to earn more from each ton.

It should be noted that earlier, the UAC already stated that the main pressure on farmers is created by rising resource prices and shortages: mineral fertilizers can add 20-25% to costs, and diesel fuel rises to 74-80 UAH/liter, which for a farm of 1000 hectares means about +1.4 million UAH in additional costs.