EastFruit analysts draw attention to the message from the Ministry of Infrastructure of Ukraine about the restart of container traffic in the Black Sea ports of Ukraine within 2-3 weeks. This news is extremely important for the Ukrainian fruit and vegetable business, especially for apple growers, as well as for fruit importers.
The inability to send and receive container cargo at Ukrainian ports after the start of Russia’s full-scale invasion of Ukraine has been a major obstacle for fruit and vegetable traders. According to the results of EastFruit retail audits, until 2022, Ukraine was the country with the lowest retail prices for most items of imported vegetables and fruits among all countries in the region, mainly due to very efficient logistics. However, currently both bananas and citrus fruits in Ukraine are more expensive than usual, resulting in billions of additional spendings for local consumers already suffering from the Russian war.
The second important aspect is the possibility of exporting apples in containers. Thanks to this opportunity, Ukrainian apples were popular in the countries of the Middle East, Southeast Asia and even Sub-Saharan Africa. However, after Russia started the invasion, ports were attached and blocked and exporters needed to transport apples to ports in the EU, mainly Romania, for reloading into containers is a significant additional cost and loss of time that Ukrainian farmers had to cover out of their own pocket. This also significantly increased the risk of loss of product quality during transportation. By resuming direct access to ports, these problems may be at least partially resolved.
There is still a problem of Houthi terror in the Red Sea which also impacts exports but alternative routs are being developed.
For the current season the influence of this factor is no longer so significant for growers and exporters, since apple stocks in storage are already low. However, in the upcoming season, when apple prices on the global market may decline, this will be an extremely important development. According to preliminary estimates, this will help save farmers in Ukraine alone up to $50 million.
As for consumers, here the economic effect, according to our estimates, may be even more significant. Consumers, EastFruit estimates, will spend at least $100 million less on imported fruits and vegetables.
It should also be noted that this achievement is a direct consequence of the effective work of the Ukrainian armed forces, which were able to eliminate a significant part of the Russian Black Sea Fleet and sharply reduce threats to civilian shipping in the Black Sea. This, in particular, has already made it possible to restore export flows of Ukrainian grains to the 2021 level. Accordingly, even if this may sound paradoxical, the best investment for Ukrainian farmers and consumers now is an investment in strengthening the Armed Forces of Ukraine.
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