MK Merchants SA as a Partner of FRACHT 2023


European logistics is getting more and more complicated for Ukrainian crops export. War, unpredictable decisions from nearest neighbors, grain corridors’ problems and unstable prices all over the world lead us to a right decision to become a Partner of one of the biggest logistics forums in Poland. Last week, during 3 days of FRACHT 2023, our MKM team had a great fruitful networking time with representatives of all prominent logistics Polish companies.

This year forum brought together about 200 representatives of logistics service providers, operators of railway and auto logistics companies, sea and land container terminals and seaports, transporters, academics and government representatives.

On the first day, participants had the opportunity to visit the CLIP terminal located in Swarzędz, Poland. This visit allowed us to get an idea of Poland's advanced logistics capabilities and operational aspects of intermodal terminals. 2-days Forum programm in Warsaw was devoted to the most pressing topics such as: the consequences of the COVID-19 pandemic; the war in Ukraine for the global economy and trade as well as how the military aggression against Ukraine had affected railway transport in Poland; new value chains based on decarburization and new fuels (hydrogen, biofuels, methanol, natural gas) and low-emission engines in transport. The discussion panels focused on the importance of building effective North-South connections for the economic development and security of Central and Eastern Europe and the coordination of cooperation between the Baltic, Black Sea and Adriatic seaports. Also it was discussed the integration of Ukraine's railway network with the European network, as well as the formats of EU solidarity and support for freight transport within the framework of Ukrainian exports and imports. This panel discussion is particularly relevant in the context of the recent decrees by the governments of Poland, Hungary and Slovakia to temporarily restrict agricultural exports from Ukraine.

Of course, this situation should be looked at from different angles, because in reality, there have always been imports from Ukraine. Since the beginning of the war, Poland has received about 3 million tonnes of grain and 700,000 tonnes of rapeseed from Ukraine. And it is not true that imports have recently increased. Ukrainian grains and rapeseed also came to Poland at a time when domestic prices were very high and corn was also imported during the harvest when both purchasing companies and feed mills were offering record prices.

Today, attempts are being made to blame the entire price drop on imports from Ukraine. But in our view, Ukraine has a small share in the strong discounts we have been experiencing since December. It is enough to look at wheat, corn or rapeseed quotes on the MATIF exchange to conclude that it is the global market that dictates prices.

Thus, the ban on imports and the introduction of only transit through Poland will not matter much, at least until the end of this season. Currently, grain imports have dropped significantly, mainly because Ukrainian grain has become uncompetitive in terms of price (mostly old contracts are being fulfilled). In the case of rapeseed, imports have completely stopped as Ukraine has already exported the entire last year's harvest.

One has also to remember the serious impact of the Russian grain export on the world markets and deliveries of what on the dumping prices as an additional element of political pressure on the international public opinion.