{"id":188156,"date":"2023-04-05T12:15:00","date_gmt":"2023-04-05T16:15:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=188156"},"modified":"2023-04-05T11:48:46","modified_gmt":"2023-04-05T15:48:46","slug":"production-and-shipping-problems-in-ukraine","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/commodities\/production-and-shipping-problems-in-ukraine\/","title":{"rendered":"Production and Shipping Problems in Ukraine"},"content":{"rendered":"\n<p>I just returned from Bucharest, Romania where I spoke at a grain conference focused on Black Sea grain production, transportation, logistics, and trading.<\/p>\n\n\n\n<p>Many of those in attendance were from Ukraine, including a representative from one on the largest producers, which farms 150,000 hectares (370,658 acres). A portion of that company\u2019s output is from an area near the deepest penetration of the Russian invasion. The producer indicated that the land was infested with land mines, some located on the surface, some just under the surface, and others at plow depth.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"850\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/thumbnail_Ukraine_Wheat_With_Mines-1100x850.jpg\" alt=\"Ukraine: Wheat Production\" class=\"wp-image-188157 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/thumbnail_Ukraine_Wheat_With_Mines-1100x850.jpg 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/thumbnail_Ukraine_Wheat_With_Mines-700x541.jpg 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/thumbnail_Ukraine_Wheat_With_Mines-300x232.jpg 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/thumbnail_Ukraine_Wheat_With_Mines-768x593.jpg 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/thumbnail_Ukraine_Wheat_With_Mines.jpg 1280w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/850;\" \/><\/figure>\n\n\n\n<p>Prior to the war, Ukraine reportedly had 3 million mines in possession, and it was under an agreement to begin destroying them. Ukraine denied using mines as a defensive measure at the start of the war, but military experts believe that both sides have used them. There are estimates Russian had 26 million mines at the start of the war.<\/p>\n\n\n\n<p>There are estimates that as many as 70,000 square miles have been planted with mines. Many of which are the \u201cbutterfly\u201d variety that are easily scattered across wide range. An area the size of Austria is believed to be affected.<\/p>\n\n\n\n<p>So far, the US has donated $89 million to locate and destroy the mines. There have been reports of them being removed at the rate of 2,000 per day, with a total of 200,000 extracted to date. There have also been reports that 10 farmers have been killed when their tractors touched off the mines.<\/p>\n\n\n\n<p>The producer mentioned above expects Ukraine\u2019s grain production to fall more than the official forecast, which calls for a 25% decline from last year\u2019s 25% decline from the record level in 2021. In addition to the lost acreage, there is a severe shortage of fertilizer. Prior to the war, Russia was a major supplier.<\/p>\n\n\n\n<p>Ukrainian exporters are having to pay demurrage charges that are triple the normal level or more. Instead of 5 euro per tonne, rates have periodically reached as high as 50 euro. A major problem is that grain trucks have sometimes have to wait for weeks to cross borders, and then once the grain reaches the Danube, the delays become even longer. In some areas the river is less than 3 meters deep, and long barge chains must be broken apart and pulled beyond the low water zone separately.<\/p>\n\n\n\n<p>There are also worries that dredging efforts, which were poor last year, may not make satisfactory progress this season. According to an official at the Danube River commission, there is a 50% chance that movement will be significantly less this year and a 50% chance that it will be slightly higher.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Published March 31, 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I just returned from Bucharest, Romania where I spoke at a grain conference focused on Black Sea grain production, transportation, logistics, and trading. <\/p>\n","protected":false},"author":94,"featured_media":188157,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,21,5,6,8,9,1031,26,3],"tags":[429,147,43,4283,252],"contributors-categories":[13645],"class_list":{"0":"post-188156","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-asia","8":"category-commodities","9":"category-europe-middle-east-africa","10":"category-north-america","11":"category-region","12":"category-securities","13":"category-south-america","14":"category-text-articles","15":"category-traders-insight","16":"tag-agriculture","17":"tag-commodities","18":"tag-russia","19":"tag-ukraine","20":"tag-wheat","21":"contributors-categories-the-hightower-report"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized 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