UKRAINE- Following the collapse of the Black Sea grain deal, the Ukrainian Grain Association (UGA) has proposed an initiative to increase its grain exports through the so-called “Solidarity Lanes” from Ukraine to European ports with subsequent shipment to third countries.
The association proposes increasing exports by 1 million to 1.5 million tonnes per month by compensating part of the costs of European carriers and ports that transit Ukrainian grain.
According to the UGA, this move will lead to a significant reduction in the cost of grain transportation and thus enable Ukrainian farmers to profitably export grain surplus to countries that need Ukrainian grain and stabilize global food security.
Russia on July 17 withdrew from the Black Sea Grain Initiative, which had allowed for the safe passage of 33 million tonnes of grains and other foodstuffs from Ukrainian ports.
The phenomenally successful grain initiative was brokered in July 2022 by Turkey and the United Nations, after Russia’s invasion in February 2022 had stopped exports, causing price inflation and food insecurity globally.
Since leaving the grain initiative, Russia has focused its attacks on Ukrainian ports and grain terminals as well as assets on the Danube River, which was providing alternate routes for grain.
The UGA said capacity can be increased on the Solidarity Lanes by exporting grain through the ports of the Baltic States (Klaipeda and others), Germany (Rostock, Hamburg), the Netherlands (Rotterdam), Croatia (Rijeka), Italy (Trieste) and Slovenia (Koper).
These routes are not used much due to the complexity and cost of logistics compared to other routes, the UGA said. The price difference is approximately US$40 per tonne.
Therefore, the UGA has asked the EU to introduce “green corridors” for Ukrainian agricultural products to the seaports of the Baltic countries, Germany, the Netherlands, Croatia, Italy, and Slovenia,
This initiative would include the transfer of sanitary, phytosanitary, and veterinary control from checkpoints on the border with Ukraine to the territory of the country of destination, which will ensure a significant increase in exports;
It will also include the introduction of subsidies from the European Commission to compensate European carriers for additional logistics costs for transit transportation and partial compensation for European ports.
The UGA said the expected export volume for Ukraine of grain and oilseeds in the 2023-24 marketing year is about 45 million tonnes, in addition to about 9 million to 10 million tonnes of oil and meal, respectively.