As Russia chokes Ukraine's grain exports, Romania tries to fill the gap
Stopping at the edge of a vast field of barley on his farm in Prundu, 30 miles outside Romania's capital city of Bucharest, Catalin Corbea pinched off a spiky flowered head from a stalk, rolled it between his hands, and then popped a seed in his mouth and bit down.
“Another 10 days to two weeks,” he said, explaining how much time was needed before the crop was ready for harvest.
Corbea, a farmer for nearly three decades, has rarely been through a season like this one. The Russians' bloody creep into Ukraine, a breadbasket for the world, has caused an upheaval in global grain markets. Coastal blockades have trapped millions of tons of wheat and corn inside Ukraine. With famine stalking Africa, the Middle East and elsewhere in Asia, a frenetic scramble for new suppliers and alternate shipping routes is underway.
“Because of the war, there are opportunities for Romanian farmers this year,” Corbea said through a translator.
The question is whether Romania will be able to take advantage of them by expanding its own agricultural sector while helping fill the food gap left by landlocked Ukraine.
In many ways, Romania is well positioned. Its port in Constanta, on the western coast of the Black Sea, has provided a critical — although tiny — transit point for Ukrainian grain since the war began. Romania's own farm output is dwarfed by Ukraine's, but it is one of the largest grain exporters in the European Union. Last year, it sent 60% of its wheat abroad, mostly to Egypt and the rest of the Middle East. This year, the government has allocated 500 million euros ($527 million) to support farming and keep production up.
Still, this Eastern European nation faces many challenges: Its farmers, while benefiting from higher prices, are dealing with spiraling costs of diesel, pesticides and fertilizer. Transportation infrastructure across the country and at its ports is neglected and outdated, slowing the transit of its own exports while also stymieing Romania's efforts to help Ukraine do an end run around Russian blockades.
Even before the war, though, the global food system was under stress. COVID-19 and related supply-chain blockages had bumped up prices of fuel and fertilizer, while brutal dry spells and unseasonal floods had shrunk harvests.
Since the war began, roughly two dozen countries, including India, have tried to bulk up their own food supplies by limiting exports, which in turn has exacerbated global shortages. This year, droughts in Europe, the United States, North Africa and the Horn of Africa have all taken additional tolls on harvests. In Italy, water has been rationed in the farm-producing Po Valley after river levels dropped enough to reveal a barge that had sunk in World War II.
Rain was not as plentiful in Prundu as Corbea would have liked it to be, but the timing was opportune when it did come. He bent down and picked up a fistful of dark, moist soil and caressed it. “This is perfect land,” he said.
Because of price rises and better production from the watering equipment he installed, Corbea said, he expected revenues to increase by 5 million euros, or 50%, in 2022.
The costs of diesel, pesticides and fertilizer have doubled or tripled, but, at least for now, the prices that Corbea said he had been able to get for his grain had more than offset those increases.
But prices are volatile, he said, and farmers have to make sure that future revenues will cover their investments over the longer term.
The calculus has paid off for other large players in the sector. “Profits have increased, you cannot imagine, the biggest ever,” said Ghita Pinca, general manager at Agricover, an agribusiness company in Romania. There is enormous potential for further growth, he said, although it depends on more investment by farmers in irrigation systems, storage facilities and technology.
Some smaller farmers like Chipaila Mircea have had a tougher time. Mircea grows barley, corn and wheat on 1,975 acres in Poarta Alba, about 150 miles from Prundu, near the southeastern tip of Romania and along the canal that links the Black Sea with the Danube River.
Drier weather means his output will fall from last year. And with the soaring prices of fertilizer and fuel, he said, he expects his profits to drop as well. Ukrainian exporters have lowered their prices, which has put pressure on what he is selling.