The increase in tariffs for railway freight transportation in Ukraine by 20% next year may lead to higher logistics costs for farmers, which already now eats the lion’s share of the export price of oilseed crops and makes the business of growing crops unprofitable. This is stated in the report of the Ukrainian Grain Association.
According to experts, agrarians in the current situation can get into even greater losses and they will be forced to reduce sowing areas for the harvest of 2024.
“In conditions when the export of grain and oilseeds is one of the main sources of foreign exchange earnings in the country, reduction of sown areas under these crops automatically means reduction of exports and foreign exchange earnings,” experts say.
They also emphasized that the reduction in production, and thus exports of grain and oilseeds, will lead to a decrease in freight transportation “Ukrzaliznytsia” and its income.
“The increase in tariffs will lead to an acceleration of inflation, and the reduction in foreign exchange earnings will lead to further devaluation of the hryvnia and additional pressure on the inflation rate. As a result, the entire economy and consumers of Ukraine will suffer from Ukrzaliznytsia’s decision to raise tariffs for freight transportation,” the UGA believes.