A 20% increase in railway freight rates threatens to reduce acreage in 2024.

The Ukrainian Grain Association expressed concern about the upcoming 20% increase in tariffs for freight rail transportation and the use of freight cars in 2024 and called on the government and Ukrainian Railways (UZ) to find mutually acceptable solutions with the agricultural sector.

It is noted that while the export of grain and oilseeds is significantly limited due to the war and expensive logistics (high tariffs for ship freight and insurance due to the risks of war), farmers are operating at a loss this year. The association notes that the increase in railway tariffs for freight transportation and the increase in the cost of using wagons will cause even greater losses to farmers, eventually reducing cultivated areas.

The export of grain and oilseeds is one of the main sources of foreign exchange earnings for Ukraine, a reduction in the area sown under these crops automatically corresponds with a drop in exports and foreign exchange earnings. A decrease in production, and therefore in the export of grain and oilseeds, will lead to a drop in UZ’s freight transportation and revenues.