Ukraine’s distressed farmers face an energy crisis ahead of the harvest season

Ukraine's distressed farmers face an energy crisis ahead of the harvest season

The total area planted due to the war is expected to be 30% less than last year. (Representative)

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After making it in the spring planting season, sometimes with the help of bulletproof vests and helmets, Ukrainian farmers are facing another challenge – finding enough diesel for the crop.

Farmers, energy distributors and analysts say the war with Russia has reduced fuel supplies just as farmers began working for the spring season and have lost about 85% of their normal supply since the conflict began on February 24.

Due to the fighting, the total area planted with crops this spring is already expected to be 30% less than last year, and if farmers do not get fuel, the yield may also decrease so that they can apply chemicals and harvest at the right time. .

Ukraine was the world’s fourth-largest grain exporter last season, supplying major commodities such as wheat and corn to Africa and the Middle East, as well as supplying half the grain collected by the UN World Food Program for emergency assistance.

With Ukraine’s Black Sea port under siege, harvesting is fast becoming a global problem, and UN Secretary-General Antonio Guterres is seeking to broker a deal to resume grain shipments – and to calm global food markets.

By the end of June 2021, Ukraine had exported 45 million tons of grain. It was expected to ramp up to 65 million after a record harvest late last year, but the war has left 21 million tons trapped in the silo that controls it until the 2021/22 season ends next month.

And while security has become the most pressing issue for farmers so far, with much of the land cut off or damaged by shelling due to Russian advances, fuel shortages have begun to bite during the next harvest.

“Fuel is the biggest problem right now,” said Kis Huizinga, a Dutch man who runs a 15,000-hectare dairy and crop farm in central Ukraine.

Severe deficit

Ukrainian farmers use 1.5 million tons of diesel each year, or more than 10% of Ukraine’s annual fuel demand in the spring, said Taras Pansyuk, commercial director at petrol station operator WOG.

Ukraine usually relies on Russia, Belarus, and imports most of its fuel by sea. Last year, for example, more than 60% of its diesel came from Russia and Belarus, Ukrainian oil product consultant A-95 estimates.

Now, Ukraine has been forced to resort to expensive and complex means of importing fuel from neighboring countries such as Poland and Romania, although these efforts have slowed down due to power shortages and red tape, the Ukrainian Oil and Gas Association said.

This task has become even more daunting as neighboring countries are facing shortages of their own diesel, while Russian attacks on Kremenchuk oil refineries and fuel depots have further reduced supplies between Ukraine.

Analysts say the shortage of tanker drivers is also hampering fuel supplies as many have been recruited for the war.

Roman Gorobets, director of FE Astra, which cultivates about 2,000 hectares of land in the central Poltava region, said the waiting time for diesel supply to farms is now two to four weeks.

“The situation has worsened. We are facing a severe energy crisis across the country,” he said.

The government has announced an agreement to import 300,000 tonnes of diesel and 120,000 tonnes of petrol to cover the month of May, and Kirilo Tymoshenko, deputy chief of staff of the Ukrainian presidency, said on Friday that 1,500 tonnes of fuel had reached LV’s customs point. Previous 24 hours.

Like other key materials such as seeds and fertilizers, farmers have so far covered their energy needs using stocks and tapping into alternative supply chains, farmers say.

Crop shift

The farms have also coordinated crop plans. Significantly, they moved away from corn because it could produce intensive and bumper crops for growth that could overwhelm Ukraine’s already full grain silos.

Instead, they are opting for barley, soybean and sunflower seeds because they are cheaper crops to grow and produce smaller volumes once harvested.

Based on reserves remaining from last year’s harvest and current monthly exports of about 1 to 1.5 million tons by land, only 65% ​​of the normal grain storage capacity will be available when winter harvest begins in July.

Some farmers, such as Gorobets, whose company completed its spring planting in mid-May, say that not being able to sell the next crop is the biggest threat to Ukrainian agriculture and the global food market.

Lack of diesel for tractors can still hamper the rest of the growing season if collisions continue.

“If you can get seeds, fertilizers, whatever chemicals you need, it’s one time. Fuel is more stable, you need it consistently,” said Matt Amerman, a product risk manager at StoneX who covers Eastern Europe.

Huijinja says Central Ukraine has enough fuel to stop planting on its dairy and crop farms, but not for the harvest, which will begin in a few months.

Like other wartime factors, the potential impact of fuel shortages on grain production is difficult to predict and the Ukrainian government has not predicted crop yields.

For wheat, mostly sown before the war as a winter crop, some analysts expect conflicts to reduce production by 35-40% from a record crop of 32 million tonnes in 2021 and pressure on the supply of fuel from fertilizer. .

Even after that level falls, it will still release about 20 million tons that need to be threshed and transported from July.

Mike Lee, director of Green Square Agro Consulting, which specializes in crop analysis in the Black Sea region, said that in such an important time for agriculture, fuel in electric machines could be a make-or-break factor.

“If you don’t have diesel, you can’t drive a tractor, no matter how much fertilizer and seeds you have.”

(Except for the title, this story was not edited by NDTV staff and was published from a syndicated feed.)

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