Unblocking Port of Mykolaiv to cut grain export costs by 15%

Unblocking the Port of Mykolaiv is expected to boost capacity in the Ukrainian corridor, reducing grain export costs by 15%, Andriy Vadaturskyy, CEO of the agroholding Nibulon, told in an interview with LIGA.net.

"Its potential is to handle 15% of the country's grain exports. If Mykolaiv becomes operational, competition will emerge, reducing export costs by an additional $10 per ton. Consequently, the entire agricultural sector will receive additional revenue from exporters' profits, which also means increased contributions to the state budget," Vadaturskyy said.

An interim solution could be relocating the grain fleet from Mykolaiv to the Danube. This would reduce export costs during transportation from Izmail to Romania's Constanta.

Another step is implementing subsidies for grain transportation by Ukrzaliznytsia railways towards Danube ports. This would level the competitive playing field with Odesa ports, said the Nibulon CEO.

However, he stressed that unblocking the port of Mykolaiv would be the most effective measure.

"All farmers will feel the effect, as it will allow them to receive more for their harvested crops. Further down the chain, they will be able to invest in land and equipment and maintain rent levels. This is how the economic multiplier works," Vadaturskyy said.

Nibulon had previously stated that the cost of transportation via the Dnieper River was three times lower than by road, following the Russian destruction of the Kakhovka hydroelectric dam. At that time, river logistics, destroyed by the dam breach, allowed producers to move up to 60 million tons of cargo annually.

Read also: Ukraine detains ship that illegally entered Russian-occupied ports – Ukrainian Navy