Russia attacks grain depots on the Danube, raising stakes on Ukraine’s last export route

Russia has attacked a Danube port in Ukraine, raising the stakes for Kiev’s last major grain export route and the global food trade.

Ukraine’s Southern Military Operations Command said on Facebook that an overnight drone strike destroyed a grain hangar in a port on the Danube River. He did not specify which outlet was hit, nor did he explain the damage.

It is the latest in a series of measures by Russia to limit Ukrainian exports, which have historically made an important contribution to the global food supply. The collapse of last week’s Black Sea grain deal, which allowed Ukraine to ship by sea, and subsequent Russian attacks on the port of Odessa have raised expectations that Ukraine will have to double down on its alternative routes — the most obvious being the Danube.

The volume of crops transported by the river reached 2.2 million tons in May, an increase of nearly 900,000 tons over the end of last year. Those shipments even surpassed exports through the Black Sea Corridor in May, due to inspections that delayed the departure of cargo ships.

Chicago wheat rose as much as 6.9% on Monday, extending its gains of more than 5% last week. Russia also launched a new barrage of missiles into Odessa over the weekend, in the biggest of a series of near-daily attacks on the Black Sea port city after Moscow pulled out of the grain deal.

Ukraine has the major ports of Rene and Izmail on the Danube River, on the border with Romania. Local merchants, including Nebulon and Kernel, were expanding their energy there in response to the Russian naval blockade. Neither of them immediately responded to a request for comment.

“These ports are Ukraine’s best hope for exporting its grain and oilseeds,” said Carlos Mira, analyst at Rabobank. We believe that Ukraine can export up to 2.5 million tons of grain and oilseeds per month through these ports. That would be enough to export most of the exportable surplus. But at the moment it is not clear how much damage has been done and whether Russia will launch repeated attacks in the future.

Ukraine’s Agriculture Minister Mykola Solsky told Bloomberg TV in an interview last week that Russia is trying to “make it difficult” for Ukraine to export grain through the Danube.