It’s been a year since the shipping agreement expired between Russia and the UN. The agreement allowed grain from Ukraine to be exported through the Black Sea without attacks from Russia. Many believed that the expiration would mean disaster for Ukranian grain shipments.
Ukraine is one of the world’s greatest exporters of grains. The country has a legendary reputation as the world’s breadbasket. In fact, some underdeveloped countries rely on imported grain, and much of it comes from Ukraine. Developed countries also find it beneficial to use Ukranian grain if they have limited ability to grow it domestically. And Ukraine’s farmers rely on the income from grain sales to keep producing.
We might have expected grain shipments to collapse. But that hasn’t been the case.
In 2024 grain exports by sea actually increased by quite a bit, close to doubling early 2023’s.
The downside of this is the exports are being maintained by a military campaign by Ukraine. It uses drones to keep the Russian navy at bay and prevent their attacks on the grain ships. The ships hug the coastlines of Bulgaria and Romania to escape Russian interdictions. Or they use the Danube River to go inland instead.
It seems wasteful to require military action to keep the grain flowing to the world.
That’s what war does; it makes people waste valuable resources, that could be used to make life better for everyone. The Ukraine war is harming everyone.
Sam Chambers July 19, 2024
Supply Chain and Logistics 