Logistics costs up to half the price of grain

The cost of logistics of Ukrainian agricultural products has increased significantly due to the war and is 30-50% of the price of grain. This was announced by the general director of “Nibulon” Andrei Vadatursky in an interview with the “Economichna Pravda“.

“Now one of the biggest components in the price is logistics. Just the projects of “Nibulon” over the past 15 years have created the conditions under which the grain was partially removed from the roads, it began to be delivered to the elevators by river transport. Now the load on vehicles and railways has increased, prices have increased, – said Andriy Vadatursky. – What is Ukraine famous for? Competitive logistics. Access to ports, Black Sea, rivers. This is not Brazil, where you need to transport products a thousand kilometers by road. This is where our biggest loss is: we have lost that advantage.”

According to him, Nibulon’s logistics costs have grown to $100-150 per ton. “This is 30-50% of the grain price. Producers and farmers are forced to pay with buyers and share the costs of this inefficient logistics. Previously, delivery from an elevator to a ship cost about $4, from a railway elevator – up to $15,” said Andrey Vadatursky.

According to the head, “after the end of the war, Ukraine will need three to five years to return to the levels of production and export that were before the war and that are needed in the world.”

The harsh route of Ukrainian grain by rail to Spain

At the same time, he expressed hope that the ports of Mykolaiv would be included in the new grain agreement.

“Our investments in relevant capacities and logistics over the years are about $2 billion. Now it doesn’t work. We do not have enough port facilities. I really hope that Mykolaiv will be included in the grain agreement,” Andrey Vadatursky said.

At the same time, the head said that he did not consider the “grain corridor” an effective solution in the long term, due to inspections and delays in the movement of ships, as well as bureaucratic “lawlessness” from Russia.

“We need a transparent formation of the queue… I think we need to work on this if we are talking about the continuation of the work of the corridor. A commission was created, and then they realized that it did not have time to check the ships. What do we have to do? They do not remove the commission, but increase the number of commissions. Now there are already five of them, but this is inefficient, the queue is still growing. What to do? Just remove this commission, no one will carry weapons in bulk carriers,” he said.

According to the head, the use of the terminal in Izmail allows the company to plan transportation for a long time. “I don’t know what we would have done without Izmail. It is impossible to plan work through the “grain corridor”. If a ship comes in, if it won’t… We are talking about this during the formal operation of the corridor. 10 or 12 ships a day call at Ukrainian ports, there has been a queue since mid-October and you have to pay for it. Izmail gives us the opportunity to plan trading activities for November, December, we are even already planning for January,” Andrey Vadatursky said.

Railway news you might have missed:

Rail partizans call on russians to join the resistance