Logistical Issues Complicate Corn Exports More Than Weather Factors

The Ukrainian corn market is currently facing significant logistical difficulties that impact grain exports far more than prolonged harvesting or high grain moisture. This was stated by Mykhailo Voronych, the CEO of Arista Trade.

This is reported by AgroReview

Reduced Railway Capacity and Increased Transportation Costs

Following recent attacks on infrastructure by Russia, the capacity of Ukraine’s railway network has significantly decreased. This has led to a reduction in the volume of trains arriving at ports and, consequently, delays in grain supply. According to Voronych, despite high demand for corn, almost nothing is arriving at the ports, and only recently have there been minor shifts in logistics.

“During the supply period when my vessels arrive, positions are almost doubled, but nothing is reaching the port. Only this week has something started to move,” Voronych notes.

The expert emphasized that the main reason for the delays is not just the wet corn or harvesting delays, but primarily issues with “Ukrzaliznytsia.” The cost of wagons has increased, and turnover has decreased from 2.5 to 1.7–1.8 times per month, and this trend is likely to continue. Additional complications arise from a shortage of locomotives, traction, and power supply disruptions throughout the railway network.

Delays of Vessels in Ports and the Search for Alternative Solutions

Due to the logistical collapse, vessels are forced to idle in ports, and traders are compelled to search for alternative cargoes that can arrive sooner than the already purchased and contracted batches of corn. In Voronych’s opinion, the current situation resembles the beginning of 2022 when wagons were massively delayed at the western border, but now they are stopping halfway.

He also emphasizes that even the largest agribusinesses, which own their own wagons, cannot organize timely delivery. As an example, Voronych cited a situation where one of the large holdings could not ensure the supply of a batch of soybeans before mid-December due to a lack of logistical capabilities.