Fuel crisis bites Ukraine’s farmers in Europe’s breadbasket

The war with Russia cut fuel supplies just as farmers stepped up work for the spring season and they have lost about 85% of their normal supplies since the conflict started on Feb. 24, farmers, fuel distributors and analysts say.

The total area planted with grain this spring is already expected to be up to 30% smaller than last year because of the fighting, and yields could drop too if farmers don’t get fuel so they can apply chemicals and harvest crops at the right time.

Ukraine was the world’s fourth-largest grain exporter last season, shipping staples such as wheat and maize to Africa and the Middle East, as well as supplying half of the grain procured by the U.N.’s World Food Programme for emergency aid.

With Ukraine’s Black Sea ports blockaded, getting crops out is fast becoming a global issue and U.N. Secretary-General Antonio Guterres is attempting to broker a deal for grain shipments to resume – and calm world food markets.

Severe shortages

Ukrainian farmers use most of the 1.5 million tons of diesel they consume each year, or more than 10% of Ukraine’s annual fuel demand, in the spring season, said Taras Panasiuk, commercial director of petrol station operator WOG.

Ukraine usually relies on Russia, Belarus and imports from elsewhere coming in by sea for most of its fuel. Last year, for example, more than 60% of its diesel came from Russia and Belarus, Ukrainian oil products consultancy A-95 estimates.

Now, Ukraine has been forced to embark on costly and complex ways to bring in fuel via land from neighbors such as Poland and Romania, though a lack of capacity and red tape has slowed these efforts, the Ukrainian Oil and Gas Association said.

That task has become more daunting as countries nearby are facing their own diesel shortages, while Russian strikes on the Kremenchuk oil refinery and fuel depots have further squeezed supplies within Ukraine.

In the 2020/21 season ending in June last year, Ukraine exported 45 million tons of grain. It had been expected to ramp that up to 65 million after a record harvest late last year but the war has left some 21 million tons stranded in silos across territory it controls as the 2021/22 season comes to an end next month.

And while security has been the most pressing issue for farmers so far, with swathes of land cut off by Russian advances or damaged by shelling, fuel shortages are starting to bite as the next harvest looms.

“Fuel is the biggest problem at the moment, more than anything,” said Kees Huizinga, a Dutch national who runs a 15,000 hectare dairy and crop farm in central Ukraine.