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Zelensky Warns of Catastrophic Ukraine Harvest as World Faces Food Crisis

Zelensky Warns of Catastrophic Ukraine Harvest as World Faces Food Crisis

Volodymyr Zelensky has warned that Ukraine’s harvest could be halved by Russia’s invasion in a move that threatens to trigger a global food crisis.

The Ukrainian president warned of a catastrophic impact on this year’s harvest in the “breadbasket of Europe” but insisted the country was finding a way for grains to be delivered alternatively.

It came as John Rich, chairman of MHP, Ukraine’s largest agricultural produce company, said that a push by Ukrainian forces in the south of the country – and an associated uptick in hostilities – could hit the rebuilding of ports and surrounding roads that are crucial to restarting grain exports.

The blockade of Ukrainian ports by Vladimir Putin’s war machine has cut off the wheat, corn, and sunflower seed giant and hampered production, leading to global food shortages and price rises.

Mr. Zelensky said in a tweet on Sunday that the Ukrainian harvest threatens to be “twice” as small as normal.

He said: “Our main goal — to prevent [a] global food crisis caused by [the] Russian invasion. Still, grains find a way to be delivered alternatively.”

Ukraine’s president said on Friday that grain shipments were ready and waiting since an UN-led pact between Ukraine and Russia was signed last month to resume exports for the first time since the outbreak of war.

But Mr. Rich, an Australian executive and agribusiness adviser for the World Bank, said that MHP would employ a “wait and see” approach and stockpile produce.

He said: “I am the world’s greatest optimist. But in this case, reality tells me this is not going to be an easy task. The spirit is thereby the Ukrainian government to try and get all this grain out. Everybody is trying to do their best. But you only can do it within the physical limitations.

“First of all, the ports have to be repaired. Secondly, we have road infrastructure to the ports that have to be repaired. Thirdly, we have to have those ports de-mined.”

Often referred to as “the breadbasket of Europe”, Ukraine accounts for 12pc of global wheat exports, 16pc of corn, and 18pc of barley. Its exports were enough to feed up to 400m people globally before the war broke out.

Mr. Rich agreed with Mr. Zelensky that Ukraine’s grain output will be severely impacted. He estimated that the wheat harvest will be 20-21m tons compared to up to 40m last year while corn production will fall from 38m tons to 27m. Sunflower seed output will drop 8m tons to 9m, added Mr. Rich.

He said: “The next month will make the real situation clearer. But we must be cognizant of the fog of war being raged in the south where these ports are in the vicinity of the Ukraine counter attacks using the latest western ordinance and weaponry.”

Western military sources say that a Ukrainian counter-offense in regions in the south of the country such as Kherson is “gathering pace” as forces using the US-supplied long-range rockets to cut it off from the rest of Russian-occupied territories.

The military efforts will likely define whether grain exports can go ahead in any meaningful way, Mr. Rich said.

“It very much depends on the course of the war. And we all know that that particular region is going to be quite hot [militarily] because Ukrainian forces are in a much better position right now to start reclaiming land from that region,” he said.

“If it is going to be hotter, militarily, in an area, we could really encounter significant difficulties in relation to the export of that grain.

“Right now, it appears that the advance by Russian military forces has been halted and we see counter-attacks. And this [is] heavily focused on the southern regions [of Ukraine], which is where the ports are.

He added that companies trying to export grains were now storing it rather than attempting distribution.

He said: “The right strategy for companies such as ourselves is to store, sit and wait. And see if the system starts to work.”

Meanwhile, Mr. Rich was skeptical about comments made by Lloyd’s of London chief executive last week that the insurance market would underwrite the dangerous sea transit of millions of tons of grain across mine-laden waters.

John Neal said on Wednesday: “The cover is literally being put in place today.” Premiums would be 15-20pc higher and would not need government guarantees, he added.

But Mr. Rich said: “Nobody is quoting war premiums [to us].

“I believe that insurance companies will need some kind of guarantee from governments to get this [grain] out.”

The MHP executive said that insurance for transporting grain via river channels was “extremely expensive”.

“Under normal circumstances, there would be no war premium. Normal insurance is in the order of $50,000 to $80,000. On top of that when the war broke out, we had to pay a war premium. And that varied between $250,000 to $450,000 on most [river] shipments.”

“The point is that right now there is a lot of talk, but it hasn’t happened.”

From The Telegraph



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