In brief: Micro and small farmers face the biggest risk from Russia’s blockade of Ukraine’s grain export corridor, PrivatBank executives told Kyiv Post on Monday. Borrowers are covering loans from reserves for now, but will need new financing for spring sowing amid rising fuel costs and unsold harvests. Missing one export season is manageable, the bank’s risk chief said, but a second would hit hard.
Micro and small farmers face the biggest risk from the blockade of Ukraine’s grain export corridor, while mid- and large-sized agribusinesses are riding out this season on their own reserves, two senior PrivatBank executives responsible for business lending and risk management told Kyiv Post at a meeting with journalists on Monday.
Russia’s second blockade of the Black Sea corridor has hit export revenues for Ukraine’s agriculture, metallurgy, and construction sectors, which mostly ship their goods through Odesa’s ports.
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Ukraine’s state-owned PrivatBank holds Hr.21.6 billion ($491 million) of net loans in agriculture, out of a total net loan portfolio of Hr.85.8 billion ($1.95 billion), according to the bank’s data.
The blockade and strikes on large retail and logistics businesses are already showing up in macroeconomic data, reflecting the economy’s suffering from the strikes. National bank of Ukraine’s (NBU) the country’s central bank, estimates the damage will subtract 1.9 percentage points from this year’s GDP, and now expects real GDP to contract by 0.4% in 2026. In the third quarter this year, real GDP contracted 0.7% year-over-year, according to State Statistics Service data.
PrivatBank’s top managers said farmers are currently storing leftover grain and preparing for the upcoming sowing campaign using reserves, though those reserves could be depleted if the blockade of the sea corridor extends until the end of 2027.
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“We see that our clients are still absorbing the challenges that exist in the market. This is happening because they have reserves; they’re paying off their loans using those reserves. And the question isn’t so much whether farmers will survive the current period and the winter, but rather what the next season will look like,” said Ievgen Zaigraiev, a member of PrivatBank’s management board and its chief corporate and SME business officer.
The bank is working with farmers to prepare for February through April, when they will need new financing, just as fuel and lubricants prices have risen and may climb further. With the harvest either unsellable or selling at a discount, farmers are short of working capital.
Zaigraev said PrivatBank has approved restructuring, loan extension and payment deferral programs for farmers who cannot sell their crops over autumn and winter. The bank is monitoring their commodity stocks and, based on each client’s track record, giving them time to keep operating.
Small producers are the most exposed because of their business model, said Oleksii Filipov, deputy chair of PrivatBank’s management board and its chief risk officer.
They typically sell the crop soon after harvest to traders, either large Ukrainian companies with their own trading divisions or international traders. Larger holdings, by contrast, have refocused on processing oilseeds and exporting their own produce while the Black Sea export corridor is blocked.
Kyiv Post has previously reported that Ukraine had been exporting an average of 4-4.5 million tonnes (4.4-5 million tons) of agricultural products per month. About 90% of these exports went through seaports, according to the NBU. Alternative routes via rail and the Danube can currently handle about 2.5 million tonnes (2.8 million tons) per month, with the potential to increase this to 3.5 million tonnes (3.9 million tons).
“The logistics chain has become 2.5 times narrower, and the part grown by small farmers, along with grain crops other than oilseeds, is the one at the main risk,” Filipov said.
Beyond its own risk mitigation, PrivatBank is working to speed up the government’s concessional “5-7-9%” lending program and risk-sharing tools from international financial institutions to help farmers who need additional funding.
Asked how the bank models bankruptcies among small producers if the ports remain blocked and nothing is sold, Filipov said missing one export season would leave the situation “quite acceptable,” because the typical small Ukrainian farmer is under-leveraged rather than deeply indebted. “If we miss a second sowing season, there will be a significant [industrial] impact,” Filipov added.
Olena Hrazhdan is the Business Reporter at Kyiv Post, covering Ukraine’s markets, business, and economic policy. While she reports broadly on economic issues, her core focus is banking, finance, monetary and fiscal policy. Olena previously wrote for leading Ukrainian business media and became a Fellow of the International Monetary Fund’s Journalism Fellowship in 2024.
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