Brussels thrashes out plan to move Ukrainian grain through EU ports

The EU could provide alternative routes for almost all of Ukraine’s grain exports following Russia’s decision to stop their passage through the Black Sea, the bloc’s agriculture commissioner said. Janusz Wojciechowski said on Tuesday that the EU should expand its “solidarity lanes” — road, river and rail links first established in 2022 after Russia’s full-scale invasion of Ukraine — to enable more food from Ukraine and Moldova to transit to EU ports for onward shipment to Africa and Asia. “We are ready to export by solidarity lanes almost everything Ukraine needs [to send] . . . about 4mn tonnes a month. We achieved this volume in November 2022,” he told a press conference in Brussels after a meeting of agriculture ministers. The EU solidarity lanes currently carry about 60 per cent of Ukraine’s grain exports, with the remaining 40 per cent going via the Black Sea.

Russia’s decision earlier this month to withdraw from the UN-backed Black Sea Grain Initiative, which guaranteed safe passage for ships using the route, has sent prices rising. Wheat prices climbed to a five-month high on Tuesday, after Russia expanded its attacks to ports that ship grain by river to Romania and destroyed a grain silo in Odesa.  Wheat futures traded in Chicago increased as much as 2.6 per cent to $7.7725 per bushel, their most expensive since mid-February. Russia and Ukraine between them produce about 30 per cent of the world’s traded wheat, raising concern over shortages.

Wojciechowski said transit costs, such as those for hiring trains and trucks, for Ukrainian grain were too high and that the EU should subsidise them, otherwise customers would buy cheaper Russian products instead. He also backed a Ukrainian demand to move customs and health checks for food cargoes from the EU border to its ports to reduce queues and costs. “Work is intensifying to increase the capacity of solidarity lanes and also to make sure we can streamline the procedures and facilitate trade flows,” said Miriam Garcia Ferrer, European Commission trade spokeswoman. Lithuania has suggested opening a northern route from Poland to Baltic ports.

Vilnius has asked the commission in a letter to invest in the route, which it said could ship 25mn tonnes of grain annually. Kęstutis Navickas, the Lithuanian agriculture minister, told reporters that European rail companies should pay to upgrade the necessary infrastructure. The railway gauge in Ukraine is different to Poland’s, so cargo has to be moved from one train to another at the border.  Kyiv has also written to Brussels asking for financial support and the transfer of the customs and health checks. Since the war began in February 2022, 41mn tonnes of grain, oilseeds and related products have left Ukraine through the solidarity lanes, compared with 33mn through the Black Sea.  Wojciechowski also said the commission would next month discuss a request by Poland, Bulgaria, Hungary, Romania and Slovakia to extend trade curbs on Ukrainian grain imports.

The five frontline states say a glut of the crop has depressed prices for their own farmers and exhausted storage space — although the Polish farm commissioner said much had now been moved on. They lifted an import ban after the commission agreed that Ukrainian shipments of five types of grain would only transit through the countries en route to other destinations. The five countries want to extend the restrictions to soft fruit and other crops and prolong the measures beyond their scheduled expiry on September 15. Robert Telus, Polish agriculture minister, has faced calls from farmers to step down over the issue, and the government is anxious to calm them before national elections in the autumn.

But German agriculture minister Cem Özdemir criticised the five countries for proposing the curbs despite taking €100mn of EU money as compensation to farmers for lost income. “It’s not acceptable that states receive funds from Brussels as a form of mitigation, and then still close their borders,” he told reporters. Luis Planas, Spain’s agriculture minister, who chaired Tuesday’s ministerial meeting, said there were “mixed feelings” about the idea. Ukraine’s president Volodymyr Zelenskyy attacked the move in his nightly address on Monday. “Any extension of the restrictions is absolutely unacceptable and outright non-European. Europe has the institutional capacity to act more rationally than to close a border for a particular product,” he said.

Tags: Black Sea, transit, shipment, Ukraine, trucks, Russia, trains, exports, river, grain, Odesa, Romania, Black Sea Grain Initiative, EU, prices, wheat