This year's grain harvest in Ukraine will decline by about 40% from last year due to the Russian invasion, according to estimates from the National Grain Association. After the record harvest in 2021 with more than 106 million tons, a decrease to 65 million tons is expected over the whole of 2022, due to a reduction in acreage and a drop in yield.
The Russian invasion, which began in eastern, southern and northern Ukraine at the end of February, has shaken the country's agricultural industry. The Russian invasion first caused a shortage of fuel “which hampered the sowing campaign,” underlined Serguiï Ivashtchenko, director of the Ukrainian grain association. The blockade of Ukrainian seaports has also prevented grain exports for months.
“The occupation of part of the regions, the hostilities in the fields, the destruction of infrastructure” reduced the area by “about a quarter”. “Usually we sowed on about 25 million hectares. This year we were able to harvest on only 18 to 19 million hectares," said the spokesman. He also pointed to “a decrease” in yield. Many farmers can no longer afford to use fertilizers.
To date, Ukraine has harvested 46.6 million tons of grain of 90% from the cultivated fields. However, 30% of the maize has yet to be harvested, Sergey Ivashchenko noted.
The International Monetary Fund (IMF) expects a sharp economic downturn in Ukraine for the coming year. A delay in the harvest due to bad weather, restrictions on logistics and working capital, as well as Russian shelling of energy infrastructure are worsening the prospects of the Ukrainian economy.
“Real GDP is expected to total contraction in 2022 at 33%,” is the base case forecast by the IMF. The risks remain extremely high.
An even more unfavorable doomsday forecast predicts an inflation rate of 40%, a drop in international reserves of $18 billion. Accordingly, this will require an additional $ 9.5 billion in budget financing on top of the base $ 39.5 billion. Last week, the Netherlands promised Ukraine extra financial support of 2.5 billion euros.