Ukraine Grain Storage Gets Funding Increase to Ease Shortages

Countries, charities — and Ukrainian farmers themselves — will fund roughly 15 million metric tons of additional grain storage in Ukraine to fix deficits caused by Russia’s invasion, the US Agency for International Development said Monday.

The extra capacity to hold grain comes amid rising anxieties about potential food shortages caused by Russia’s war on one of the world’s top wheat-producing countries, which has exacerbated existing supply chain constraints linked to the pandemic. Researchers have warned grain storage shortages affect not only a country’s immediate food output, but also future harvests, as farmers are discouraged from planting if they don’t have space to store grain.

A September report drawing on satellite images showed Russia had knocked out 14% of Ukraine’s grain storage since invading, with overall storage capacity falling to 49.8 million metric tons. The extra 15 million metric tons of storage, funded by a range of countries and international organizations, would boost Ukraine’s capacity above its pre-war levels.

Earlier: Russian Invasion Knocked Out 14% of Ukraine’s Grain Storage

“These unified efforts are a testament to what can be accomplished when donors and the people of Ukraine unite to address surging food needs around the world,” USAID said in a press release provided to Bloomberg Government.

Credit: US Agency for International Development

The storage equipment in action.

Funds for the extra storage come in part from the United Nations Food and Agriculture Organization, with financial donations from Canada, Japan, and the Australian Minderoo Foundation. USAID and the U.S.-based Howard G. Buffett Foundation are also donors, and Ukrainian farmers will cover the costs for over 6 million metric tons. The donation through USAID is worth roughly $8 million, a spokesperson said.

Ukraine’s Ministry of Agrarian Policy and Food requested the supplemental storage amount, citing farmers inability to safely store their harvests this year. Ukraine’s grain exports were almost halved year-over-year, the country reported in August, even after an agreement opened multiple Black Sea ports that Russia had blockaded.

Farmers in Ukraine will be able to store more agricultural products until they’re sold for export, processing, or domestic use, USAID said in the release. These crops include corn, wheat, and sunflower seed, three of the country’s top agricultural exports. Ukraine is also the top exporter of sunflower oil in the world.

The project will fund storage bags, structures, and filling equipment, USAID said, with many able to be reused in future harvests. “As Putin continues to manipulate the global food supply, allies and partners have united to support Ukrainian farmers as they continue to feed the world,” the independent agency said.

With assistance from Mike Dorning (Bloomberg News)

To contact the reporter on this story: Maeve Sheehey in Washington at msheehey@bloombergindustry.com

To contact the editors responsible for this story: Anna Yukhananov at ayukhananov@bloombergindustry.com; George Cahlink at gcahlink@bloombergindustry.com