KYIV -- Kernel Group, one of Ukraine's largest agricultural companies, is building a new terminal in Odesa with a grain export capacity of 4 million tons per year, the Ukrainian Sea Ports Authority has announced.
Kernel’s project, announced Tuesday, is just the latest of 36 planned private investments that are to nearly triple the country's annual grain exports capacity to 157.3 million tons by 2020, according to an accounting by Vyacheslav Voronoy, a logistics executive at the state-controlled Ports Authority.
These investments amount to a multi-billion dollar gamble that Ukraine will emerge in the 2020s as one of the world’s top five food powers. Present export capacity is 58.5 million tons per year, comfortably above this year’s expected export level of 41 million tons. This year, exports are to be up 4 percent from last year’s level of 39.5 million tons.
This year’s grain crop, the largest since Independence in 1991, is caught in a squeeze created by Ukraine’s creaking state-controlled railway. There is ample privately-controlled infrastructure on each end of the tracks -- grain silos and ports.
But the rail bottleneck is so severe that some corn will stay on stalks through the winter. It will be harvested in the spring and sold to American ethanol producers. At harvest time, big farm companies routinely keep welders on call to repair defective state railroad grain hoppers as they roll up the sidings to company silos.
In response, Prime Minister Volodomyr Groysman announced last week that the state railroad, Ukrzaliznytsa, will buy 9,000 new freight cars next year.
Private Port Projects
On the Black Sea, of the 36 new planned export terminals, 10 are under construction. Their capacity is a combined 33.8 million tons per year. The other 26 are in the planning stages.
Kernel is a major exporter of Ukrainian sunflower oil and grain from the Black Sea basin. Its new terminal will be able to hold 190,000 tons of grain at one time, according according to the Ports Authority.
Ukraine already is one of the top three grain producers in the world. Blessed with the world’s largest ‘black earth belt,” Ukraine’s government is focusing on agricultural production and exports to new markets.
According to the Ministry of Agrarian Policy and Food, Ukraine's total grain harvest from the beginning of the year through mid-November totaled 59 million tons of grain, which exceeds the same period last year by 876,000 tons. Over 63 million tons is expected to be collected by year's end. Of this, 23 million will be consumed in Ukraine.
According to the Port Authority, the drive to expand ports is attracting the interest of foreign firms. In October, representatives from two major global port operators, DP World and Hutchison Ports, came to Kyiv to explore entering Ukraine.
For comments and story tips, please contact UBJ Kyiv Correspondent Igor Kossov at firstname.lastname@example.org
Photo: The Ukrainian Sea Ports Authority hopes to oversee a near tripling of Ukraine’s grain export capacity by 2020. This will be a pillar of the nation’s drive to export food to new world markets. (UNIAN: Supplied)