Prices for wheat and corn are rising due to the accident at the Kakhovka hydroelectric power station, farmers are worried about losses, while analysts are not too concerned.

According to information published in the "Kommersant" newspaper, prices for wheat and corn have risen after the accident at the Kakhovka Hydroelectric Station. On Tuesday, June 6, July wheat futures rose by almost 4%, and corn by 2%. Participants in the food market fear a decrease in grain supplies. It is likely that in the near future losses will be incurred due to damage to grain storage facilities at the lower reaches of the Dnieper River. Ukrainian authorities predict the transformation of coastal lands into a desert as early as next year. Currently, water reserves are only available for irrigation in 6% of irrigation systems in the Kherson region, 26% in Zaporizhzhia, and approximately a third in Dnipropetrovsk.

The head of the agricultural farm "Lazarevskoye," Kristina Romanovskaya, is confident in the further rise of prices for agricultural products in the global market. However, she states that Russia will not be as severely affected, saying:

"This will primarily affect prices, possibly leading to a risk of scarcity. As for Russia, as far as I know, there will be no critical rise in grain prices due to the presence of state duties. However, the cost of grain will certainly increase.

Our farmers have already suffered greatly this year due to critically low prices. This has affected the entire agricultural sector of Russia, as farmers engaged in crop production only have gone bankrupt. I would even say that this has affected the demand for agricultural machinery, fertilizers, and plant protection products. Farmers' profits fell by 10% overall last year.

Perhaps we will be able to somehow rectify the situation in the agricultural sector of Russia in 2023 due to recent events. However, it is still a major tragedy, and prices for agricultural products on the global market will continue to rise rapidly."

However, Andrey Sizov, director of the analytical center "Sovekon," claims that wheat, corn, and sunflower grown in the Dnieper River basin do not require irrigation. He asserts that the accident at the Kakhovka Hydroelectric Station has a negligible impact on the global agricultural market:

"Irrigation is required for the production of vegetables and rice in Crimea due to the accident. However, the yield of these crops represents an insignificant part of agricultural production in Russia, as well as in Ukraine, not to mention on a global scale.

Therefore, we do not see a significant direct impact of the accident on production and exports. It is too early to speak about long-term consequences, as we do not know what changes will occur in the soil in the Kherson and Zaporizhia regions. We do not know the condition of the bottom of the Kakhovka Reservoir and whether there are any toxic deposits that could spread to agricultural lands around the Dnieper River. However, this is still not a major issue for the global market."

He also notes that agriculture in the Kherson and Zaporizhia regions covered about 0.5 million hectares. However, the share of these regions in sunflower production was only about 5-6%, and in wheat production it was 6-7%.

Both risks are being assessed in Kyiv and Moscow. According to Ivan Fedyakov, CEO of the information and analytical agency Infoline, the restoration of the Kakhovka Hydroelectric Station is impossible. However, once the water level in the Dnieper decreases, construction of a dam to fill the Kakhovka Reservoir can begin. He also noted that the possibility of dam restoration exists, but it should take place in peacetime. Otherwise, coastal lands will indeed face a water shortage.

Due to the shallowing of the reservoir in the Dnipropetrovsk region, fish stocks have started to decline, as reported by Andrey Yermak, a representative of the Ukrainian president's administration. Authorities are prohibiting the consumption of fish due to potential botulism problems.

The total damage from the loss of plant and animal life due to the accident at the Kakhovka Hydroelectric Station amounts to about $300 million, according to estimates in Kyiv. Additionally, there is a risk of pollution downstream from Nova Kakhovka due to graveyard erosion.