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Mykola Maliienko, a 70-year-old farmer in central Ukraine who grows crops and exports to Europe, is cutting back about 100 hectares of corn in the spring season this year. He said he is tightening costs after fertilizer prices surged amid the Iran conflict.
What worries him most is the money to buy diesel fuel to harvest 1,200 hectares by the end of the year. Diesel prices have nearly doubled since US and Israel strikes on Iran disrupted energy supplies on an unprecedented scale.
Despite entering the fourth year of the war with Russia, Ukraine remains a major producer of grains, oilseeds and vegetable oils.
Data from Ukraine’s Ministry of Economy shows the country now exports food to 150 economies, down from around 190 countries and territories before Russia launched its large-scale military operation in Ukraine in February 2022.
The export market structure has also changed. Ukraine’s exports to Asia, Oceania and the Middle East have declined, while exports to Europe have risen. Analysts say Russia has gained additional market share from Ukraine, especially in wheat.
One risk to Ukraine is the Middle East conflict, which is increasing Russia’s economic advantage. As a major producer of oil and gas, Russia could benefit from high energy prices. While Russian farmers have access to fertilizers and diesel domestically at low costs, Ukraine must import these goods.
Maliienko forecasts production costs could rise by at least 10–15% this year. If the Middle East conflict lasts longer, he said the rise could reach 60%.
He also warned that export potential may decline. “This year, the drop could be around 15–20%. If the situation continues, the figure could reach 40%,” he told Reuters.
After Russia launched its military operation and blocked the ports on the Black Sea—the route that previously accounted for 90% of Ukraine’s grain exports—Ukrainian farmers shifted shipments through smaller river ports on the Danube and by rail to Eastern Europe.
This change pushed up logistics costs, reduced exports, and left larger inventories of grain in the country. As a result, prices for agricultural products in Ukraine fell, and many farmers incurred losses.
The situation began to stabilize from 2023, when a UN-mediated grain corridor opened, helping Ukraine’s exports gradually recover.
Ukrainian government data shows agricultural exports earned the country more than $22 billion last year, accounting for more than half of total exports. The figure is described as a vital source of foreign currency and a special budget for President Volodymyr Zelensky’s government.
However, last year’s grain and oilseed exports were 47 million tons, about 25% lower than before the conflict.
The war has also left farmers short of labor, while transport networks and power supply have been frequently disrupted.
Russia’s drone and missile attacks have damaged Ukraine’s refineries, forcing the country to rely on imported diesel from Europe to operate machinery and support the military.
In Ukraine, diesel demand typically rises sharply in spring during planting, in late summer during harvest, and in early autumn when sowing winter grains, mainly wheat.
Maliienko said that since the end of February, diesel prices have almost doubled to 92 hryvnia per liter, equivalent to about $2.11.
He said farmers now face a decision: whether to buy fuel now to guard against shortages and rising prices, or wait for the market to cool. “I don’t want to be in a situation where the grain is ready to harvest in the field but there is no diesel to harvest, and then receive a quote of up to 150 hryvnia,” Maliienko said. He made the comment earlier this week, before Iran and the US reached a two-week ceasefire on Tuesday (April 8), which helped ease oil prices.
Even with a ceasefire, analysts said global oil prices are still volatile and the market will likely need months to return to normal supply after recent disruptions.
On Tuesday, the Ukraine Farmers Union (UAC) trade department forecast that fuel and fertilizer prices would remain high for at least the next three months.
Dmytro Skorniakov, CEO of HarvEast, an agricultural company operating tens of thousands of hectares and exporting grains and oilseeds, said modern technology can partly offset the impact of reduced fertilizer use. However, he said fuel costs leave farmers with little room to maneuver, particularly during harvest.
“A high fuel price could force farmers to reduce winter grain sowing areas. Some may even skip this sowing altogether,” Skorniakov said.
He added that drone and missile strikes on Ukraine’s fuel depots have deterred suppliers from stocking large quantities. “This is really Ukraine’s biggest problem. Fertilizers can still be purchased in advance thanks to storage and long-term contracts. But with fuel, stockpiling in advance is nearly impossible,” Skorniakov said.
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