Jun 22 2022
Grains traders Bunge and Viterra said June 22 that missiles had hit their grain and sunflower oil terminals in Nikolayiv, one of Ukraine's most important agricultural ports, as Russia's war with Ukraine encompasses key commercial assets.
The attacks on Nikolayiv come just under four months after the country was invaded by Russia and on the same day a refinery in Southern Russia said that two drone strikes had forced it to suspend operations.
The port typically handles around a third of Ukraine's total grain exports, and like Ukraine's other deep water ports, it had been closed since the end of February.
The resulting loss of corn, wheat and sunflower oil to the global market has prompted U.S. Secretary of State Antony Blinken to accuse Russia of "weaponizing food."
"Viterra can confirm that its Everi terminal was hit and is currently on fire. There are no fatalities," said a spokesman for Glencore's agricultural unit. The terminal has a total storage capacity of 160,000 mt and can load up to 1.5 million mt of vegetable oil per year, which is equivalent to around a quarter of Ukraine's total sunflower oil exports in the marketing year 2020-21 (July to June).
Crop trader Bunge said its facility had also been hit. "A more thorough inspection is required to assess the exact impact on the facility," the company said in a statement, adding that the plant had been closed since Feb. 24. In its most recent annual report, the company said that it had total assets of $681 million in Ukraine as of Dec. 31, 2021. Bunge, which is the world's largest oilseed processor, also owns two crushing facilities in Ukraine and a share in a corn milling plant there.
There were also reports of strikes at other facilities in the city, but they couldn't be confirmed.
Ukraine is one of the world's largest grains producers and its war with Russia has led to food prices being driven up in recent months. Prior to Russia's invasion, the US Department of Agriculture had expected Ukraine to export 16.9 million mt of wheat and 33.5 million mt corn in MY 2021-22, which represented 12% and 16% of global trade, respectively, for the two grains.
The June 22 attacks come two weeks after another Russian attack in Nikolayiv, which hit the Nika-Tera terminal, owned by Group DF, with a grain storage capacity of 515,000 mt.
The most severe damage to any commercial asset so far inflicted by Russian troops has been in the steel sector with Rinat Akhmetov now seeking $17 billion to $20 billion from Russia for the damage to his Azovstal steelworks, according to an interview with Ukrainian news portal mrpl.city.