As Russia chokes off grain exports from Ukraine, Romania tries to fill

Pausing at the edge of a vast field of barley at his farm in Prundu, 30 miles from Bucharest, the Romanian capital, Catalin Corbea pinch...

Pausing at the edge of a vast field of barley at his farm in Prundu, 30 miles from Bucharest, the Romanian capital, Catalin Corbea pinched a flowering head bristling with a stem, rolled it between his hands, then popped a seed in his mouth and bit.

“Another 10 days to two weeks,” he said, explaining how long it takes before the crop is ready for harvest.

Mr. Corbea, a farmer for nearly three decades, has rarely experienced a season like this. The bloody Russian invasion of Ukraine, a breadbasket for the world, has caused upheaval in world grain markets. Coastal blockade have trapped millions of tons of wheat and corn inside Ukraine. With famine in Africa, the Middle East and elsewhere in Asia, a frantic rush for new suppliers and alternative shipping routes is underway.

“Because of the war, there are opportunities for Romanian farmers this year,” Corbea said through an interpreter.

The question is whether Romania can take advantage of this by developing its own agricultural sector while helping to fill the food gap left by landlocked Ukraine.

In many respects, Romania is well positioned. Its port of Constanta on the western Black Sea coast has provided a critical – albeit tiny – transit point for Ukrainian grain since the start of the war. Romania’s own agricultural production is dwarfed by that of Ukraine, but it is one of the largest grain exporters in the European Union. Last year, it sent 60% of its wheat overseas, mostly to Egypt and the rest of the Middle East. This year, the government has allocated 500 million euros ($527 million) to support agriculture and maintain production.

Yet this Eastern European nation faces many challenges: its farmers, while benefiting from higher prices, are faced with soaring costs for diesel, pesticides and fertilizers. Transport infrastructure across the country and at its ports is neglected and outdated, slowing the transit of its own exports while hampering Romania’s efforts to help Ukraine circumvent Russian blockades.

Even before the war, however, the global food system was under pressure. Covid-19 and supply chain lockdowns have pushed up fuel and fertilizer prices, while brutal dry spells and unseasonal flooding have reduced harvests.

Since the start of the war, about two dozen countries, including India, have tried to increase their own food supplies by limiting exports, which has worsened global shortages. This year, droughts in Europe, the United States, North Africa and the Horn of Africa have all weighed more heavily on harvests. In Italy, water was rationed in the agricultural Po Valley after river levels dropped enough to reveal a barge that sank The Second World War.

The rain was not as heavy in Prundu as Mr Corbea would have liked, but the timing was right when it arrived. He bent down and picked up a handful of dark, damp dirt and patted it. “It’s perfect land,” he said.

Thunderstorms are forecast, but this morning the seemingly endless hairs of barley float under a cloudless cerulean sky.

The farm is a family affair, involving Mr. Corbea’s two sons and his brother. They operate approximately 12,355 acres, growing rapeseed, corn, wheat, sunflower and soybeans as well as barley. Across Romania, yields are unlikely to match the record grain production of 29 million metric tons from 2021, but crop prospects are still good, with plenty of exports.

Mr Corbea slips into the driver’s seat of a white Toyota Land Cruiser and drives through Prundu to visit the maize fields, which will be harvested in the fall. He has been mayor of the town of 3,500 for 14 years and waves to every passing car and pedestrian, including his mother, who stands outside his house as he passes. The trees and splashes of red and pink rosebushes that line every street were planted and tended by Mr. Corbea and his workers.

He said he employed 50 people and made €10 million in revenue a year. In recent years the farm has invested heavily in technology and irrigation.

Amid rows of leafy green corn, a long center-pivot irrigation system perches like a giant skeletal pterodactyl with outstretched wings.

Due to higher prices and better production from the irrigation equipment he has installed, Mr Corbea said he expected revenue to increase by €5m or 50% , in 2022.

Diesel, pesticide and fertilizer costs have doubled or tripled, but, at least for now, the prices Mr Corbea said he was able to get for his grain had more than offset those increases.

But prices are volatile, he said, and farmers need to be sure that future earnings will cover their long-term investments.

The calculation has paid off for other big players in the industry. “Profits have grown, you can’t imagine, the biggest ever,” said Ghita Pinca, managing director of Agricover, an agribusiness in Romania. There is huge potential for future growth, he said, although it depends on increased investment by farmers in irrigation systems, storage facilities and technology.

Some small farmers like Chipaila Mircea have had tougher times. Mr. Mircea farms barley, maize and wheat on 1,975 acres in Poarta Alba, about 150 miles from Prundu, near the southeastern tip of Romania and along the canal that connects the Black Sea to the Danube.

Drier weather means its production will fall from last year. And with soaring fertilizer and fuel prices, he said, he expects his profits to fall as well. Ukrainian exporters have lowered their prices, which has put pressure on what he sells.

Mr. Mircea’s farm is about 15 miles from the port of Constanta. Normally a major hub for grain and trade, the port connects landlocked Central and Southeastern European countries like Serbia, Hungary, Slovakia, Moldova and Austria to Central and Eastern Asia and the Caucasus region. Last year, the port handled 67.5 million tonnes of freight, more than a third of a grain. Today, with the port of Odessa closed, some Ukrainian exports pass through the Constanta complex.

Railroad cars, stamped “Cereale” on their sides, dumped Ukrainian corn onto underground conveyor belts, sending puffy clouds of dust to the terminal operated by the US food giant last week Cargil. At a wharf operated by COFCO, China’s largest food and agricultural processor, grain was loaded onto a freighter from one of the huge silos that lined its wharves. At COFCO’s front door, trucks sporting Ukraine’s distinctive blue and yellow striped flag on their license plates waited for their grain shipments to be inspected before unloading.

During a visit to Kyiv last week, Romanian President Klaus Iohannis said that since the start of the invasion, more than a million tonnes of Ukrainian grain had passed through Constanta to places around the world.

But logistical problems prevent more grain from making the trip. Ukraine’s railway gauges are wider than those elsewhere in Europe. Shipments must be transferred across the border to Romanian trains, or each wagon must be lifted from a Ukrainian running gear and wheels to a wagon that can be used on Romanian tracks.

Truck traffic in Ukraine has been slowed by safeguards at border crossings – sometimes for days – as well as fuel shortages and damaged roads. Russia has targeted export routes, according to the British Ministry of Defence.

Romania has its own transit issues. High-speed rail is rare and the country does not have an extensive road network. Constanta and surrounding infrastructure also suffer from decades of underinvestment.

Over the past two months, the Romanian government has spent money cleaning hundreds of rusting railroad cars from the tracks and rehabilitating tracks abandoned when the communist regime fell in 1989.

Yet trucks entering and leaving the port from the highway must share a single-lane carriageway. An attendant holds the door, which must be lifted for each vehicle.

When the bulk of the Romanian harvest begins to arrive at the terminals in the next two weeks, the congestion will worsen considerably. Every day, 3,000 to 5,000 trucks will arrive, causing miles of setbacks on the highway to Constanta, said Cristian Taranu, general manager of terminals run by Romanian port operator Umex.

Mr. Mircea’s farm is less than 30 minutes’ drive from Constanta. But “during the busiest times, my trucks wait two, three days” just to enter the port complex so they can unload, he said through an interpreter.

This is one of the reasons why he is less optimistic than Mr Corbea about Romania’s ability to take advantage of agricultural and export opportunities.

“Port Constanta is not prepared for such an opportunity,” Mr. Mircea said. “They don’t have the infrastructure.”

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Newsrust - US Top News: As Russia chokes off grain exports from Ukraine, Romania tries to fill
As Russia chokes off grain exports from Ukraine, Romania tries to fill
Newsrust - US Top News
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