Miller Magazine Issue: 156 December 2022

81 ARTICLE MILLER / DECEMBER 2022 being discussed. The question is what Russia is bargaining for in return, and whether the parties can agree to these demands. 2. Russia’s trial withdrawal from the deal and its very quick return showed that the positions of the international community are strong and it can essentially work without Russia’s participation. However, in this case, the risks of shelling increase. This concerns not so much the ships off the ports, but rather the port infrastructure and ships at the berths. The approach of new ships for loading becomes a problem since neither ship owners, nor insurers, nor the crew themselves are often prepared for such risks. 3. The termination of the grain deal will lead to another wave of global price growth, but the mar- ket will react less and less be- cause these risks are already so much built into the price. For example, after Russia’s short- term withdrawal from the deal, the Chicago corn price grew by 2.5%, and then fell by 2.6% af- ter the return. At the next perfor- mance of this kind, the reaction will be even smaller. 4. Possible domestic price decrease will no more be a slump either, since the prices of major grains are already below the break-even point. Rather, it will affect the amount of corn left in the fields and spring planting. The farmer has already turned on the sav- ing mode: to preserve the existing grain and refrain from new monetary investments, including planting. 5. Grain production will shrink to the volume needed for domestic consumption and overland export (55-60 M mt). Ex- pensive logistics, when the cost of transportation has already equaled the cost of the product itself, will lead to an even more pronounced shift of production and processing to Ukraine’s western border. At the same time, farms in the southern and eastern regions will have to change their activity profile. 6. In western Ukraine, such regional changes will give rise to or enhance an existing trend towards setting up clus- ters/holdings/associations/companies, each comprising several fields of operation, i.e. cultivation, storage, process- ing, transportation. Similar clusters will emerge in the rest of the country, but they will be small and focused on the domestic consumer. For example, flour and butter making, bread baking, meat production and processing to meet re- gional demand. UkrAgroConsult offers its ex- pertise on the changing markets, covering the Black Sea, as well as the global agri trends. With a head office in Kyiv, Ukraine and newly launched in Central Eu- rope, Montenegro we effectively source and deliver the first hand data and analytics. The company provides indepen- dent market coverage and own vision of the ongoing large-scale changes and those, highly likely in the short and medium term. UkrAgroConsult analysts assess various market scenarios, as well as new opportunities and threats for trad- ers, farmers and investors. We are sure that quality market information and analy- sis now is a fundamental factor for effective decision mak- ing, search for new solutions and collaboration to promote global agribusiness and food resilience.