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EU, Kyiv Ponder Alternatives to Black Sea Grain Shipments

Brussels and Kyiv are weighing a range of poor choices for getting Ukrainian grain to world markets after Russia withdrew from the Black Sea grain initiative and started attacking Ukrainian sea and river ports. But experts doubt that any land routes can fully replace the blocked seaports.

The United States will also work with its EU allies and other partners to find new ways to get Ukrainian crops out, National Security Council spokesman John Kirby told reporters at a White House briefing on Wednesday.

“But it’s not as efficient, you can’t move as much or as fast be it landwise, truck or rail” as could be done through Black Sea ports if the grain initiative had been extended, he added.

“We are back to how it was between February and July of 2022 during the (Russian) blockade of Ukrainian Black Sea coastline,” said Volodymyr Dubovyk, a visiting professor at The Fletcher School at Tufts University.

Now no ships will transport Ukrainian goods through the Black Sea because of the risks of sea mines and Russian attacks – risks that no insurance company will cover – he told VOA Ukrainian.

Recalling the months before the Black Sea grain initiative was signed a year ago, Dubovyk said: ‘We had been looking for alternatives at that time and discovered that there are none.”

EU Solidarity Lanes

In May 2022, the European Commission launched the Solidarity Lanes Action Plan to establish alternative routes for Ukrainian exports via rail, road and inland waterways. These ran through Bulgaria, Hungary, Poland, Romania and Slovakia.

So far, according to the EU, 41 million metric tons of grain, oilseeds and related products have left Ukraine through the Solidarity Lanes. They facilitated the export of around 60% of Ukraine’s grain since the start of the war; the remaining 40% has been exported via the Black Sea Grain Initiative.

After Russia pulled out from the grain initiative last week, EU Agriculture Commissioner Janusz Wojciechowski said the bloc is ready to export almost all of Ukraine’s agriculture goods.

However, the effort is complicated by political pressure from farmers in several of Kyiv’s EU neighbors, who fear that some of the Ukrainian grain will be diverted to their domestic markets, driving down prices for their own crops.

In May 2023, the EU allowed the five Solidarity Lane countries to ban domestic sales of Ukrainian wheat, maize and oilseeds until September 15, while allowing the grain to transit through them. Since the Black Sea initiative expired, several of those countries have called for an extension of the ban and the EU has promised to consider it.

The Baltic route

Now a search is on for new routes to get Ukrainian grain to ships bound for markets in Africa and Asia, where it is an important source of nutrition for millions of people.

One possible route being considered would run through Poland to seaports in the three Baltic states. The scheme has been proposed to the European Commission by Lithuania’s transport, foreign and agriculture ministers.

Responding to VOA Ukrainian’s email inquiry, Lithuania’s Ministry of Transport and Communications said this route “has already been tested quite many times, yet the full potential is still far from being tapped into.”

The existing infrastructure — including railways, roads and the seaports of Tallinn, Riga, Ventspils, Liepaja,and Klaipėda — has a combined annual capacity of 25 million metric tons for grain alone, added the ministry.

Algis Latakas, director general of the Klaipėda State Seaport Authority, explained in an email that his port can handle up to 15 million metric tons of grain a year, while the country ships out only 3.5 million tons of its own grain. All the unused terminal capacity could be used for handling Ukrainian grain, he wrote.

The Lithuanian Ministry of Transport and Communications, meanwhile, suggested that bottlenecks at the Ukraine-Poland border could be resolved by shifting customs, veterinary and phytosanitary control from there to the Baltic ports.

However, the most direct route from Ukraine to the Baltic ports runs through Belarus, a Russian ally, closing off that option. The only alternative route to Klaipeda is through Poland, whose railways are built on a different width of track, or gauge, than those in Ukraine and the Baltic states.

Therefore, a way is needed to facilitate cargo handling on the borders, where the grain would need to be off-loaded and reloaded, said the ministry.

The Estonian port of Tallinn, which has one of the largest grain terminals in Europe located in the Muuga Harbour, is also ready to handle Ukrainian grain, port representatives told VOA Ukrainian via email. However, they wrote, “logistically it would make more sense to use Polish ports also because of geographical distance.”

The Balkan route

Another offer to transport the Ukrainian grain has come from the Balkans.

On July 18, during a session at the U.N. General Assembly, Frano Matušić, Croatia’s state secretary for political affairs, said his country has offered its rail network and ports on the Adriatic Sea as an alternative export route for Ukrainian grain.

Montenegro has also offered to transport grain from Ukraine through its Adriatic port of Bar. The port’s note, shared in Ukrainian media, says that the total capacity reaches 5 million tons per year, and on average only 50% of its potential is used. The port authority says it cooperates with forwarders from Serbia, which could help in organizing the process of cargo logistics.

Ukraine is already using Adriatic seaports to export some crops, but that won’t solve the problem, said Mykola Gorbachov, president of the Ukrainian Grain Association. He explained that the infrastructure of Europe is “technically built in a way that it cannot absorb the amount of grain we could transport.”

“For example, Poland exports 6 million tonnes of crops a year. Romania — through its biggest port Constanta — exports 25 million tonnes a year. Bulgaria, through all its ports — 6 million tonnes. And these are the large agriculture exporters of grain.”

Leonid Kozachenko, the president of the Ukrainian Agrarian Confederation, told VOA Ukrainian that Kyiv has asked European partners to expand the capacity of these land routes, but the partners are reluctant.

“They argue that they need to invest billions, but they are sure that sooner or later the war will be over, and these routes won’t be necessary,” he said.

Kozachenko added that he considers Bulgarian and Romanian routes leading across Moldova and the Danube River to Black Sea ports more viable than the other land corridors through Europe.

However, the risks involved were highlighted just days ago when Russia attacked a Ukrainian grain storage facility in the Danube port city of Reni, near the border with Romania.

Raising world food prices

Experts agree that any land transport of Ukrainian produce increase the cost of food in Europe and around the world. The International Monetary Fund estimated that Russia’s exit from the Black Sea initiative could drive global grain prices up by 10-15%, but said it was continuing to assess the situation.

The cost of transporting Ukrainian crops grew from $30-35 per tonne before Russia’s full-scale invasion to $140-150 now, Kozachenko said, “so in many cases Ukrainian farmers are losing money, not even covering the cost price.”

Source : VOA

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