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  • Writer's pictureКущ Олексій

The economic situation in Ukraine. Thematic issue: the Odesa grain initiative

More than 15 million tonnes of grain and agriculture products have been exported from Ukraine since the Black Sea Grain Initiative was launched in August 2022, Ukrinform сites Turkish Defense Minister Hulusi Akar.

According to Turkish officials, millions of tonnes of food products were safely sent from Ukrainian ports to countries in need.

"Thanks to the work of the Joint Coordination Center established in Istanbul, more than 15 million tonnes of food were safely sent from Ukrainian ports to countries in need," Akar said.

He also added that Turkey, especially in the recent period, conducted active diplomacy to end the Russian-Ukrainian war as soon as possible and achieve a ceasefire, and made a great contribution to signing and continuing the shipment of grain to overcome the food crisis that threatens the whole world.

On November 17 in Istanbul, Ukraine, the United Nations, and Turkey agreed to extend the Initiative on the Safe Transportation of Grain and Foodstuffs from Ukrainian ports (the Black Sea Grain Initiative) for another 120 days. The initiative was launched on July 22, and the first vessel with Ukrainian grain left the port of Odesa on August 1.

How did the Odesa Grain Initiative affect the foreign exchange market?

There were fears that in connection with the NBU's increase in the terms of return on foreign exchange earnings by exporters to 180 days, currency funds for the shipped grain would arrive in Ukraine with a time lag of 4-6 months from the date of shipment.

According to NBU data regarding operations on the cashless foreign exchange market, during the ten months of the war (March-November 2022), the purchase of foreign currency in dollar terms by bank clients (mainly importers) amounted to 42.63 billion dollars.

The sale of currency by bank clients (mainly exporters) is 38.85 billion dollars in equivalent.

The negative balance in favor of the outflow of currency from the country is at 3.78 billion dollars, but considering the dynamics of the drop in exports during the war, this is almost an optimal ratio.

The situation could have been much worse.

As can be seen from the table, the largest volumes of currency sales were in July 2022. It happened because July was the deadline for the sale of currency by exporters for shipped goods, including before the start of a full-scale war.

At the same time, in August-November 2022, we have the dynamics of foreign exchange sales 1.3-1.5 times greater than in March-June 2022.

In November 2022, the amount of currency increased to 5 billion dollars. Once can attribute the increase to the effect of the Odesa Grain Corridor.

Ukrainian exporters can receive up to 4 billion dollars for already shipped grain. Export revenue and signs of receipt of these funds have already appeared on the foreign exchange market of Ukraine, starting from September of this year.

The maximum indicators of foreign exchange earnings from the operation of the Odesa Grain Corridor should be expected in January-April 2023, which will be a significant factor in the exchange rate stabilization of the national currency (hryvnia) in the winter-spring period of next year.

It's worth noting that from the point of view of geopolitical marketing, the launch of the Grain from Ukraine program was highly successful for Ukraine. 22 countries have already joined, encouraging the supply of Ukrainian grain as humanitarian aid to the poorest countries in Africa and Asia who suffer from food shortages.

This will make it possible to neutralize the influence of Russian propaganda and strengthen international support for Ukraine among African countries, which are currently taking a wait-and-see position in the context of their assessments of Russian aggression against Ukraine.

According to Turkey's estimates, 44% of Ukrainian grain within the framework of the Odesa grain initiative was sent to European ports and only 14% to Africa. This was immediately picked up by Russian propaganda.

At the same time, it should be taken into account that the majority of cargo carriers of Ukrainian grain use European ports as transit ports (transshipment capacities have been created there for this purpose). In addition, from Ukrainian grain, European companies create semi-finished products (flour, etc.) and finished products (compound feed, fodder, etc.), which also go to the African sales market. With this, from the point of view of the distribution of food calories, the main beneficiaries of the Odesa Grain Corridor are the poorest countries in Asia and Africa.


· The Odesa grain initiative is becoming an important factor in increasing foreign currency inflows to Ukraine and guaranteeing the stability of the hryvnia exchange rate in winter.

· The main beneficiaries of the unblocking of export logistics channels in Odesa ports are Ukraine as an exporter, Turkey as an intermediary, and the poorest countries of Asia and Africa as importers of Ukrainian grain (directly or in transit from European ports).

· The Grain from Ukraine program has become an extremely successful combination of "geopolitical marketing" and an effective humanitarian initiative in the fight against hunger in the world.

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