Ukrainian Forces closed the Black Sea for Russia – Kremlin acknowledged the blockade
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Ukrainian Defense Forces have closed the Black Sea to Russian grain exports. Russia has acknowledged that the Black Sea route has been paralyzed following a series of Ukrainian attacks and is considering exporting grain via the Northern Sea Route. However, experts doubt this route can compensate for the loss of Black Sea capacity. Deputy Minister of Agriculture of the Russian Federation Maxim Borovoy announced that the possibility of using the Arctic route is being considered, according to the Russian social network for farmers, Agrobook.
According to him, the Northern Sea Route was previously hardly considered as a route for grain exports, but now the situation has changed. However, the official did not name specific volumes of grain that could be transported via the Northern Sea Route. Meanwhile, the Russian grain industry is much more skeptical about the government's plans, The Moscow Times notes . Arkady Zlochevsky, President of the Russian Grain Union, stated that there is currently no full-fledged alternative to Black Sea ports. For example, to export via the Baltic Sea, Russian companies would have to use the ports of Latvia and Lithuania, provided that these countries would even agree to accept such cargo, while the Vysotsky grain terminal in the Leningrad region has a capacity of approximately 3 million tons per year. By comparison, under normal conditions, Russia is capable of exporting a volume of grain comparable to this figure in just one month through its Black Sea ports. The problem is already extending beyond export logistics and is beginning to directly affect Russian agricultural producers. Zlochevsky warns that due to oversupply, domestic grain prices are declining, and purchases have virtually stopped. This poses a threat to preparations for the fall planting campaign. "There's nowhere to put the harvest," complained the head of the grain union. Farmers need to purchase fuel, fertilizers, seeds, and other resources for sowing now, but due to falling incomes, many farms lack the funds. According to analysts, the situation in the Russian grain sector is deteriorating at an incredible rate due to attacks on ports and oil refineries . Farmers can't export grain, can't afford to transport it, don't have enough storage space, and aren't sure they'll have enough fuel to plant by September. Export options by rail and across the Caspian Sea are limited. The latter option is economically viable for shipping, while the former is not. But even there, there are no buyers willing to accept the more than 30 million tons of grain that Russia will be unable to export if the situation persists until July 1 of next year. Due to the shutdown of grain terminals in Novorossiysk and Taman, grain trucks are sitting idle in large numbers in southern Russia. Trans-Favorit, which operates a fleet of 200 leased trucks specializing in grain transportation, has seen its revenue drop by 90%, and its entire fleet is idle.
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