Record-Low Danube Strains Vital Route for Black Sea Grain

a1oc(msk0k{znduoi6orh{0a_media_dl_1.png Bloomberg RSS

Article content

(Bloomberg) — Black Sea grain exports are facing fresh constraints as record-low Danube levels restrict flows through Romania just as escalating Russian strikes divert Ukrainian grain from Odesa and other ports.

Article content

The Black Sea is the primary export gateway for Russia and Ukraine, the two agricultural powerhouses that together account for more than a quarter of global wheat exports. Intensified attacks by both sides on grain infrastructure and vessels in the region have renewed concerns over the reliability of shipments from one of the world’s most important breadbaskets, adding risk to global food supplies already battered by bad weather.

Article content

Article content

Article content

Since Russia’s full-scale invasion in 2022, Romania’s Constanta port has become a critical alternative exit point for Ukrainian grain to get to global markets. Typically, cargo from Ukraine reaches the port by rail, road, and barges along the Danube. But heat waves and the absence of rain have lowered water levels on the river, forcing vessels to carry lighter loads.

Article content

Article content

That’s making river freight pricier, with a knock-on effect that’s adding costs and delays to road and rail transportation just when the Black Sea export corridor needs backup. It’s also hindering flows from Romania, a major contributor to European Union grain shipments.

Article content

“Romanian farmers no longer have access to trucks, and transport costs have increased dramatically,” said Stan Tiberiu-Dan, vice president of the Forum of Professional Farmers and Processors of Romania. 

Article content

For growers looking to move wheat, sunflower and rapeseed downriver toward Constanta, this means fewer barge rotations, longer waiting times and higher freight rates on the Danube corridor that are already running above seasonal norms, the Forum of Professional Farmers and Processors of Romania added in a statement.

Article content

Article content

“My grain terminal could take 20% more quantity to serve the Solidarity Lane project with Ukraine,” said Viorel Panait, president of the Constanta Port Business Association and general director at Comvex SA, one of the operators of the grain terminal. But the Danube feeds cargo to the terminal and “the fact that there isn’t enough water affects the quantity of grain that arrives.”

Article content

The Solidarity Lane project was launched by the European Commission in 2022 to help establish alternatives to Black Sea shipping routes for Ukrainian agricultural exports.

Article content

Ukraine’s state rail operator is also in talks with neighboring countries to add new export routes to create more avenues to move its grain. Still, the railway combined with the Danube river route can only transport a third of the capacity of Ukraine’s Black Sea ports, according to Agrarian Minister Taras Vysotskyi. 

Article content

The disruptions come at a time when agricultural markets are facing an unusually powerful El Niño as well as higher energy costs and snarled trade routes because of the tensions in the Middle East. Last month, wheat and corn futures surged in both Paris and Chicago.