Food and energy dislocations are not going away anytime soon.., and a big part of the reason is Russia’s unpredictable war on Ukraine. The war and its blockades, destruction, and sanctions are squeezing world grain, oil, and fertilizer supplies, with impacts expected long after the conflict ends.
Iowa Senator Joni Ernst; “There’s a lot of infrastructure issues, and we’re just going to have to address that as we go, absolutely.” And Missouri Senator Roy Blunt; “Understand that there are going to be consequences from ports that don’t work – a country that provides so much of the food.”
Russia’s already captured much of Ukraine’s Black Sea coast and its ports, except for one. American Farm Bureau’s Dave Salmonsen; “Port of Odesa, of course, is the major port there under Ukraine control. If, for some reason, the Russians take it over, will they see the need, at some point, for trade to re-happen, use that seaport, certainly the most efficient way to get grain out, or will that be a pressure point on the Ukrainian government?”
The EU is trying to open rail transit routes for Ukrainian grain, but track gauges to the west are different than Ukraine’s rails. So, Odesa remains key. Salmonsen; “Even if things stay the way they are and the port, technically, stays open, but ships can’t enter the Black Sea, commercial ships, they can’t get insurance for it, and the harbors have been mined.”
Add to that, possible theft—Ukraine accuses Russians of stealing 100 million dollars’ worth of grain in occupied areas, further complicating the threat of food inflation, world hunger, and unrest this fall.