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Deteriorating Agricultural Situation in Ukraine has Implications for World Markets

06/13/2023

 


Breached Nova Kakhovka Dam

Informed observers estimate that agricultural output from the Ukraine will be one third lower for the 2022/2023 harvest compared to the previous year.  Reconstruction of elevators, oilseed crushing plants, infrastructure and de-mining fields will eventually require close to an investment 0f  $400 billion.

 

The situation has been exacerbated by the destruction of the Nova Kakhovka Dam and Hydroelectric plant on the Dnipro River.  The event that occurred on Tuesday, June 6th at 03H00 local time has inundated over 25,000 acres of rich, agricultural farmland, destroyed infrastructure and flooded towns and villages.  The impact is reminiscent of the destruction of the May 1943 destruction of the Mohne and Eder Dams on the Ruhr Valley in Operation Chastise during WWII.  In addition to destruction of agricultural potential, the water behind the broken dam was used to cool reactors at the Zaporizhzhia nuclear plant currently occupied by forces of the Russian Federation.


Destroyed port installations

It will be some time before the impact of the destruction of the Nova Kakhovka Dam becomes apparent and to assess the effect on world markets for grain.