BizWatch Ukraine: Daily Report from the Business Front

On the recent International Day of the Black Sea, President Zelenskyi took the opportunity toemphasize the unmatched importance of this sea — not only to its immediate neighbors but also toEurope, the Middle East, and the framework of global food security.

For genera+ons, the Black Sea has been an epicenter for commerce and cultural dialogues.Encompassing a vast 436,000 square kilometers, it holds the +tle of the world's largest inland bodyof water. Flanked by six diverse na+ons, the sea is fed by vital rivers such as the Danube, Dniester,Dnieper, and Don, reinforcing its role as a conduit for trade and transporta+on. The Bosporus Strait,ac+ng as a nexus between Europe and Asia, further augments its geostrategic prominence.

Yet, in recent +mes, Russia's ac+ons have led this historically peaceful and coopera+ve region into arealm of tension, endangering mari+me freedom and global coopera+on. In Zelenskyi's words, "Theessence of the Black Sea must be reclaimed, urging na+ons to come together to resurrect its legacyof peace, flourishing trade, and collec+ve growth.

Peeling back the layers of the Black Sea reveals not just a haven for commerce but also a reservoir ofbiodiversity. However, challenges such as overfishing, pollu+on, and habitat degrada+on havestrained its ecosystem. Progressive na+ons, aware of these issues, have been rallying to insrututemeasures to rejuvenate the sea's ecological health.

Moreover, the geopoli+cal intricacies of the Black Sea, defined by the naval presence and territorialclaims, have been sources of intermiWent fric+on. These highlight the paramount importance ofpreserving freedom of naviga+on and fostering diploma+c conversa+ons.

Looking ahead, the Black Sea's narra+ve is one of resilience, integra+on, and poten+al. A combinedvision and collabora+ve endeavors by its bordering na+ons are pivotal to ensure that it continues toshine as a symbol of peace, economic dynamism, and cultural unity.

In today's fast-paced world, success becomes easily overlooked. At the onset of full-scale aggression,many doubted Ukraine's resilience. Yet now, the remarkable achievements of our citizens andsoldiers are taken for granted. The valiant efforts of Ukraine in the Black Sea conflict will undoubtedlybe a focal point in history, even if they aren't widely acknowledged in present discussions.Regardless, we remain commiWed to playing our role.

Orlivka-Isaccea Ferry Crossing with Romania Restored Attack

A\er a month-long hiatus due to damage from a Russian drone strike, the Orlivka-Isaccea ferryservice connecting Ukraine and Romania is once again opera+onal. During this period, travelers facedsignificant disrup+ons, having to seek alterna+ve routes for their cross-border journeys.

Wheat Crisis: Why Ukraines Farmers Cut Down on Winter Crops

The confluence of low grain prices and summer drought has deterred farmers from sowing theirfields this year. As a result, they're urging the government to offer preferen+al loans. Why the delay?A poten+al decline in next year's wheat and rapeseed harvest could dent the na+on's trade balance.

Winter wheat fields this fall have shrunk to half of what they were in 2021, pre-conflict. Oleg Veselovof "NIBULON" predicts a near halving of the wheat harvest next year due to scarce moisture andfinances. Damaged landscapes and le\over military debris from the war account for about 30% ofthe reduced winter areas.

Weather condi+ons were favorable during the 2022/23 sowing campaign, yielding a produc+veharvest. But factors like dropping export crop prices and droughts have hit farmers hard since. Dieseland fer+lizer price hikes haven't helped either.

The financial fallout for grain and oilseed producers this year is es+mated to be around $2.5 billion(UAH 100 billion). The proposed solu+on? A loan program with reasonable interest, a con+nua+on ofthe "5-7-9%" scheme, but with increased limits.

State budge+ng has usually allocated about UAH 20 billion annually for business support, withfarmers receiving half. In 2023, UAH 9.76 billion is slated for suppor+ng farmers, UAH 8.5 billion ofwhich will cater to the "5-7-9” loan interest compensa+on. Taras Vysotskyi of the Ministry of AgrarianPolicy expects the 2024 state budget to sufficiently cover interest compensa+ons.

The credit benefits don't end at sowing. They extend to investments in processing projects like pig ordairy farms. The current profitability for pig breeders has surged due to low grain prices.

However, Professor Oleg Nivievsky argues against loaning to meat industry players, sugges+ng theyshould self-finance, given their current profitability.In a grim outlook without loans or favorable weather, exports of wheat and rapeseed could slumpnext year. The poten+al decline in these key export commodi+es, which earned billions in the pastnine months, could have severe economic implica+ons for the country.

Source: Liga.net

Photo: Jeff Schmaltz, MODIS Rapid Response Team, NASA/GSFC