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The feast while the plague is raging around

Today (April, 24th) the Ukrainian military forces resumed the anti-terrorist operation (ATO). The hottest spot at the moment is Slaviansk (Donetsk oblast). This city has the strategic significance since it is equidistant from the three big and very important centers, namely, Donetsk, Dniepropetrovsk and Kharkiv. At the moment the Slaviansk is controlled by the terrorists who keeps as hostages several people, among whom is the American journalist Simon Ostrovsky who works for Vice online.

To slow the ATO terrorists began to use small children in day care centers as the “live shield” that practically is the copy of the Palestinian terrorists’ tactic. At the same time the Russian army is nearing the Russian-Ukrainian border threatening to invade if the ATO will not be stopped immediately. The situation is highly explosive. The full-scale war between Russia and Ukraine may start any moment.

How do all these events impact the Ukrainian agriculture? The answer is: in no way in the short term and significantly in the long run.

The seeding of the corn and sunflower has already begun.

The grain export in the 2013/14 marketing year is expected to be 30 mln tons (of the total grain crop of 57 mln tons), of which corn is 19 mln tons. The forecast for grains for the 2014/15 MY is practically the same: export 30 mln tons of the total crop of 57 mln tons. The corn export is forecasted at 19 mln tons and wheat at 9 mln tons.

The main corn importing countries are: the EU – 44 percent, Egypt – 14%, Korea – 11%, Japan – 9%, Iran – 6%, Israel – 3%, Syria – 2%, Tunisia – 2%.

The forecast for the oilseeds are as follows: rapeseed – 2.2 mln tons (of which 2 mln tons will be exported), soybeans – 3.2 mln tons (export 1.7 mln tons), sunflower – 11 mln tons.

The main destinations for the export of rapeseed are: the EU – 77%, Pakistan – 10%, UAE – 6%, Vietnam – 5%.

The main destinations for the export of soybeans are: the EU – 47%, Russia – 14%, Egypt – 14%, Turkey – 13%.

In the 2014/15 MY China will begin the import of the oilseeds.

The annexation of Crimea by Russia forced the Ukrainian grain traders to redirect the grain flow to “Big Odessa” (Odessa, Illichivsk and Yuzhniy), Kherson and Mykolaiv ports.

The long run impact of the possible military conflict is the sharp increase of the financial risks and the restriction and even freezing of a lot of the investment projects.

The annexation of Crimea has created problems for grain export from the Ukrainian Azov sea ports (Berdyansk and Mariupol) since the pass through the Kerch strait is now under the Russian control.

The export throughput of the Ukrainian grain terminals is about 35 mln tons a year though in some months grain export reached as much as 5 mln tons a month.

This is the short term scene.

On the long run the situation becomes opaque with the high risk of the war and the domestic Ukrainian economic situation. The military aspect I described earlier. Now let’s look at the economy.

Since January the Ukrainian currency devalued by 50 percent. The main inputs such as fuel, fertilizers and pesticides had become more expensive by the same rate. Actually it will not have a big effect on the producers’ income since the internal prices on grain and oilseeds are tied to the global markets. But at the moment it makes the life difficult keeping in mind that the interest rates are about 30 percent per annum.

Let us return to Crimea. The funniest thing about Crimea is that the corresponding statistics is already excluded from the Ukrainian one but at the same time is not included yet in the Russian one. So Crimean Ag statistics now is like a “Terra incognita”.

At last Ukraine has stopped the water supply to Crimea which caused the very big problems to the Crimean farmers that grow grain, corn and vegetables, including potato. The damage may be 100 percent loss of the crop. The Crimeans began hurriedly to drill the water wells but this is highly expensive. Russia promises to build the water ducts from Kuban river but this (even being implemented) requires huge investments and will take at least three years to implement. The problem is that there is not enough water supply even for the Kuban region.

With the possible military conflict between Russia and Ukraine there started the trade war between them. Russia practically banned the import of almost all of the Ukrainian foodstuff from confectionary to dairy products, meat and vegetables. The Ukrainian government threatens to counteract with the… complaint to WTO. To me it seems a quite weird response.

I began this story with the title “The feast while the plague is raging around”. Now I want to explain it.

While the Ukrainian army is craving for the necessary equipment, ammo and other things to stop the Russian invasion the General Staff rewarded itself with the bonuses of about 1.0  mln USD for the maneuvers it supervised in March-April.

This madness to some extent may be explained by the admission of the military experts that the 30% of the top command of the Ukrainian army are the Russian intelligence officers.

Iurii Mykhailov,


8 Replies
Senior Advisor

Re: The feast while the plague is raging around

Very disheartening news. But it reveals a certain logic that is backed by the trend of the events.


Putin's demands this morning indicate that he is serious about demanding Ukraine cede control of its eastern territory or Russia will intervene. He's either painting himself into a corner due to stupidity (which I don't think is true) or he decided to invade some time ago. The conclusion, as you indicate, is that the war has already begun and we're just waiting for the hostilities to begin. Otherwise Putin would have to back down in some way. I don't think he intends to do that. This was all planned some time ago.


My condolences.





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Veteran Advisor

Re: The feast while the plague is raging around



Wow. A fascinating explanation of your country's unrest. I want to thank you for letting us peek into the goings on of what could prove to be a historic time in this world. Whether other countries will admit it, what goes on with this struggle in Ukraine, could change the face of the Black Sea Region. As others have said before, first its Crimea, then Ukraine. What's next for Russia, if Putin flexes his military might throught that part of Europe?

Also, thanks for drilling down and spelling out the impacts on agriculture and exports.


Thanks and God Bless all of you there,



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Senior Advisor

Re: The feast while the plague is raging around

My question, where the #%&@ is Europe
At? Can't they do anything in their
Back yard.
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Senior Advisor

Re: The feast while the plague is raging around

I don't think any military expert would recommend military action in Ukraine as it's too much to Russia's advantage and the supply situation is not going to support such a remote area.


Also, note luril's comment about the Ukraine military leadership being so heavily infiltrated by Russia. Add to that the automatic shut down of NG to Europe if things get hot. Poland is the closest NATO ground and it is a relatively recent addition in terms of integration to NATO or the EU. Russia isn't strong enough to threaten Europe proper but Ukraine is not easily accessible from the west.


Russia will hurt itself greatly by carrying therough with the invasion of Ukraine as it will then only be a gas station with a lot of restrictions suddenly placed on its activity. It may also become the starting point of popular disillusionment with Putin's policies among Russian citizens as they start feeling the pain while the oligarchs run them off the roads in their armored limos and Maseratis. The common man doesn't have it so great there. This may be Putin's biggest miscalculation.


Re: The feast while the plague is raging around

Europe is tied very closely with Russia by trade and finances. The attitude of Europe towards Russia may be best described by the quote of 19th century economist T.J. Dunning ("Trade’s Unions and Strikes: Their Philosophy and Intention"):

“Capital eschews no profit, or very small profit, just as Nature was formerly said to abhor a vacuum. With adequate profit, capital is very bold. A certain 10 percent will ensure its employment anywhere; 20 percent certain will produce eagerness; 50 percent, positive audacity; 100 percent will make it ready to trample on all human laws; 300 percent, and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged.”


Senior Advisor

Re: The feast while the plague is raging around

THAT is a powerful quote. And evidence for it occurs daily.

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Honored Advisor

Obama's next job


Senior Advisor

Re: Obama's next job

Hahaha! Yeah, right. Is this the course where Bundy becomes groundskeeper and then claims it as his own because he says he's slept in the equipment shed since 1872 ??? Hahaha!


There is one possibility that comes to mind that Luril hinted at in his description of the motivations of money. The oligarchs MAY decide Putin's escapades are too old school and are wrecking their business party. And decide to off him. You know, "Hey boss, don't take it personally. It's just business."


One could hope. But I'm inclined to think a lot of china is going to get broken in the shop before it's over.