Difficult choice: Ukraine looks for new ways to export its grain

2022/06/16 at 1:57 PM

Due to the Russian blockade, Ukraine vitally needs to arrange the new transport corridors for moving its export goods abroad. Poland and Romania have already become the new gateways for the neighbouring country, which is at a full-scale war for more than three months in a row. The unclear situation with the blockade of the Ukrainian seaports motivates the country’s government to seek new ways for its export. Which one can be the most reliable option?

“We are talking about the formats of railway export; we have been already doing this. We have been already exporting more than 2 million tonnes per month, but this is not enough for us, because we can export 10 million tonnes per month by sea, “said Volodymyr Zelensky, the President of Ukraine, during the 21st Asia Security Summit that took place on 10-12 June. Currently, there are two key railway routes to export the Ukrainian grain – via Poland and Romania, mainly to the seaports of the two countries. However, the congestions at the railway border crossings force the Ukrainian shippers to look for new ways. In this regard, there could be three options.

Illustrative picture. Loading a bulk ship with Ukrainian grain, source: AgroVista

Naval convoys

Taking into account the above-mentioned figures, Ukraine is very interested in unblocking, at least partial, of its Black Sea harbours. Meanwhile, even if its ports are accessible for commercial vessels, the shipments can be carried out only under the naval convoys that will guarantee their safety. What countries can meet these expectations? President Volodymyr Zelensky dropped a hint in this regard.

“We spoke with mediators – with the Republic of Turkey, with the United Nations, with the United Kingdom, Canada, many European countries. The format is being discussed today. I believe that despite what Russia is offering there; we do not believe them. We are ready to talk to the civilised world and therefore support the format of making a safe transport corridor, a maritime corridor of our partners’ ships, through which we can export grain,” he said at the 21st Asia Security Summit. However, none of the mentioned states has expressed their willingness to participate in such campaigns. As a result, the idea cannot be brought to life.

Towards Baltic Sea via Belarus

Starting from early May, the idea of arranging a new humanitarian corridor to transport grain from Ukraine to the ports of the Baltic states has been discussed by politicians of several countries. The main advantage of the proposed route is the similar railway gauge in Ukraine, Belarus and the Baltic states. As a result, the grain can be quickly moved from Ukraine to the ports of Klaipeda, Riga or Tallinn without any transhipment.

Illustrative picture. Freight train in Belarus, source: Belarusian Railway

However, it is Belarus that is the most interested in this route as it can demand some preferences, first of all, the partial lifting of the Western sanctions, etc. This suggestion has been approved many times by the Belarusian officials. “The best destination is Belarus. We do not mind, carry via Belarus, but there must be compromises: from us to you, from you to us,” said Alexander Lukashenko, the disputed president of Belarus, in early June.

The idea of the corridor via Belarus is not popular in Ukraine and the Baltic states. From the Ukrainian point of view, Belarus is a satellite state of Russia as it supports the military hostilities and allowed the Russian Armed Forces to use its territory for offensive campaigns toward Kyiv and Chernihiv in March 2022. The governments of the Baltic states have a similar vision. “Lukashenko has shown that he is in the same boat as Vladimir Putin in this heinous aggression. My opinion and assessment do not change: we need to look for other alternatives,” noted Gitanas Nauseda, the President of Lithuania.

Illustrative picture. Nibulon grain terminal on the Dnieper River, source: Nibulon

Plan B

The third option was announced earlier this week by Taras Vysotskyi, the first deputy minister of agrarian policy and food of Ukraine. According to him, if the partner countries failed to arrange naval convoys from the ports of the Greater Odesa, Ukraine should increase storage facilities to keep grain from this and last year’s harvest for a longer period until it will be sent to the European ports. The process has been already kicked off.

The Ukrainian official stated that there could be a deficit in storage capacities for 10-15 million tonnes of grain. “Therefore, there is a Plan B for grain storage now, in case of impossibility of fast export: mobile elevator cans and hoses are imported to have in reserve the potential equipment for storage of these additional tonnes,” he specified.

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