Ukraine’s victories over Russia’s Black Sea fleet reopen vital grain corridor

Ukrainian grain exports more than doubled in December compared with September. (Photo: Serhii Korovayny for The Wall Street Journal)
Ukrainian grain exports more than doubled in December compared with September. (Photo: Serhii Korovayny for The Wall Street Journal)

Summary

Ukrainian naval drones have put swaths of the Black Sea all but off limits to the Russian Navy and allowed Ukraine to increase grain exports close to prewar levels.

SOKOLIVKA, Ukraine—Farmers like Oleksandr Kosenyuk in this central Ukrainian village are ramping up exports of grain thanks to a surprising military success that has subdued the Russian Black Sea Fleet hundreds of miles away.

Ukrainian naval drones have sunk a series of Russian warships, putting swaths of the Black Sea all but off limits to the Russian Navy and allowing Ukraine to increase grain exports close to prewar levels from its main ports in Odesa.

“It is thanks to our armed forces," said 46-year-old Kosenyuk, whose nearly 7,000-acre farm grows wheat, barley and corn, among other crops. “Without the corridor, we don’t have exports, we don’t have an economy. That is one of the enemy’s main aims: to destroy the economy."

It is a rare bright spot for Ukraine, which has suffered recent setbacks on the battlefield and is anxiously watching political disputes in the U.S. that have stalled much-needed additional funding. The increased income is providing a timely boost for the country’s economy, which lost around one-third of its output in the first year of the war before clawing back about 5% in 2023.

Grain exports more than doubled to more than 5 million metric tons in December compared with around 2 million tons in September. The increase, if sustained, should add $3.3 billion to exports this year and 1.2 percentage points to economic growth, according to Yulia Svyrydenko, Ukraine’s economy minister.

Ukraine was a global top-five exporter of grains, exporting about two-thirds of its output, mostly by ship, until Russia’s full-scale invasion in February 2022. Shipments from ports in Odesa were halted as Russian warships sailed nearby and fired artillery on the city.

Turkey and the United Nations brokered a deal starting in July 2022 to allow some ships carrying grain to sail out. But they suffered delays averaging five or six weeks due to inspections by Russian and other officials. Other export routes, such as overland via Poland or from river ports on the Danube, are expensive, slow and overloaded. Trucks loaded with grain can be parked in lines for days.

Ukraine’s maritime exports were dealt a further blow in July after Russia declined to extend the grain deal. Many farmers were forced to load grain in huge white silo bags, usually used for temporary storage, as they ran out of space in grain silos and warehouses. “It was a total collapse," said Kosenyuk.

Then, from August, Ukraine took the battle to the Russian Navy with a series of strikes on warships and naval facilities. Although Ukraine has no large warships of its own, it has used naval drones and cruise missiles to devastating effect, sinking ships in the open seas and in their main home ports of Sevastopol and Novorossiysk. In the last four months of 2023, Ukraine destroyed one-fifth of Russia’s Black Sea Fleet, according to the British Ministry of Defense.

Ukraine also used drones to strike a Russian oil tanker that had resupplied Russian forces in Syria, serving as a warning of a broader threat. The effect was to put much of the Black Sea off limits for the Russian Navy and open space for commercial ships to restart grain exports from Odesa.

“It has been a showcase of power," said Andrey Stavnitser, co-owner and chief executive of TransInvestService, which operates Ukraine’s largest dry-goods port. “Russia only understands power."

The ships hug the coast to stick to the waters of Romania, Bulgaria and Turkey, which are all members of the North Atlantic Treaty Organization, further reducing the threat of Russian interference. As the first ships passed without incident, shipowners sent larger vessels. Exports for now are mostly grain and iron ore, but Stavnitser said he hopes to launch container exports soon.

A key ingredient for shipping is insurance. The Ukrainian government has worked with international insurers, including Lloyd’s of London and Marsh McLennan, to help grain ships sailing to and from Ukraine find affordable coverage. Without insurance, few commercial vessels would have dared anchor at Ukrainian ports. On March 1, this program was expanded to all nonmilitary cargo such as steel and iron ore.

The aim, said Economy Minister Svyrydenko, is to make Ukraine more self-sufficient and less dependent on foreign aid.

Hundreds of trucks now line both sides of the road near one Odesa port. On a recent day, a local man was eagerly shoveling corn that had spilled from one vehicle into a bucket that he had stashed in the trunk of his car.

There are dark spots. Bumper exports have been driven by a surplus of products that were accumulated while exports were squeezed, said Volodymyr Slavinskiy, director of trade at Nibulon, one of Ukraine’s biggest grain exporters. The cost of logistics and production is higher than before, cutting into profit and investment, Slavinskiy said. For the agricultural year ending in June, farmers in Ukraine will plant grains on an area nearly one-third smaller than before the war, according to a U.S. Department of Agriculture forecast.

Attacks on Odesa are continuing. A deadly missile strike there on Friday highlighted the continued threat. Ukrainian officials said at least 20 people were killed after one missile that hit a residential area was followed by a second after rescuers arrived. Dozens more were injured.

Dockworkers halt operations during air-raid alerts, increasing loading times. “We need more air defense," said Stavnitser. “This is the bottleneck."

Still, Kosenyuk, the farmer, said the influx of cash is allowing investment. He is putting money into new projects, such as growing and processing vegetables to replace produce from land in Ukraine’s south that was occupied by Russia or spoiled when a dam was blown up.

Kosenyuk is also making what he says are equally vital investments in Ukraine’s armed forces. He provides troops with off-road vehicles and food, from canned meat to dumplings stuffed with cabbage or potato. At Christmas, he sent nearly 60 lbs. of food to every soldier from the village.

“Our job in the rear is to fill the budget," he said. “It is to finance the armed forces above all."

Yusuf Khan, Anna Hirtenstein and Oksana Grytsenko contributed to this article.

Write to James Marson at james.marson@wsj.com

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