At the end of last week, logistical tensions began to ease on the Ukrainian grain market, which had caused transportation costs to skyrocket to record levels, according to ProAgro Group.

According to Konstantin Khalakhandrik, co-founder of the brokerage company White Brokers, logistics costs rose sharply at the beginning of this week, in some cases to UAH 1,800-2,000 per ton. The highest rates were recorded in the Kyiv region and part of the Sumy region. However, there were few actual deals at such prices.

“This hype around logistics began to subside somewhat at the end of the week. Even free railcars began to appear. It was a situational hype, where large volumes of shipments of old forwards, ”hot” contracts, and forwards extended for the third time due to the difficult situation with traction power overlapped. The railcars are idle, and they are moving very slowly,” explained Khalakhandrik.

In his opinion, this gives reason to expect a decrease in transportation costs by 100-200 UAH/t.

The situation is also affected by port infrastructure problems. Due to power outages and delays in approving plans, congestion has occurred at some terminals. This led to some railcars arriving for loading without confirmed plans, and owners had to urgently reorient them to other batches or transfer them to other shippers. As a result, the supply of available railcars has increased, Khalakhandrik noted.

As reported, the imbalance in freight transportation threatens agricultural production and the economy of Ukraine.

Source: Latifundist.com