UKRAINE’S AGRICULTURAL EXPORT IN THE CONDITIONS OF WAR AND THE WAYS OF ITS RECOVERY

Abstract

The losses and risks for Ukraine’s agricultural exports caused by the blockade of Ukrainian seaports by the Russian armed forces are assessed, the ways of the partial recovery of the agricultural export in the conditions of hostilities and post-war revival of export markets are substantiated. The consequences of war for the grain market are determined. It is established that Ukraine lost the opportunity to export almost a quarter of the volume of grain intended for export in 2021/22 marketing year. This situation pushes up world food prices and threatens the food security of low-income countries dependent on food imports. During the first two months of Russian military invasion, the relocation of the trade flows on the world agricultural markets has already begun, which in case of long-term hostilities might lead to a partial loss of export markets by Ukraine. The most obvious partial solution to this problem is the organization of special "green corridors" with the help of EU countries, which will allow Ukraine to export food through the ports of the Baltic Sea.

In order to restore domestic exports, it is advisable to: i) negotiate further trade liberalization with trading partners, primarily the EU and the UK, in order to affirm temporary trade preferences that have been or are likely to be granted to Ukrainian exports; ii) simplify procedures of trade with the EU and Moldova in order to increase exports of agricultural products by railways and road transport; iii) support the Export Credit Agency activities in providing credits and insurance for exports of the processed agricultural products. At the same time, the situation with the agricultural exports blocking clearly demonstrated the vulnerability of the export-oriented commodity-based agriculture model in Ukraine and necessitated its replacement with a model capable to ensure sustainable agricultural and rural development.