Ways of solidarity: Ukrainian grain producers call on the EU to simplify transit and compensate costs

The Ukrainian Grain Association (UGA) has sent an appeal to the European Commissioner for Trade, Valdis Dombrovskis, to support the optimization of alternative routes, known as "Solidarity Routes", for grain exports from Ukraine to European ports and third countries. The association proposes to increase exports via the "Solidarity Routes" by 1-1.5 million tons per month, as well as to compensate for part of the costs of European carriers and ports transiting Ukrainian grain.

According to the UGA, such measures will significantly reduce the cost of grain transportation and enable Ukrainian farmers to export their surplus grain to countries in need at a break-even level and contribute to the stabilization of global food security.

Data on grain yields and exports demonstrate Ukraine's significant contribution to the global agricultural market. In 2022, Ukraine harvested more than 73 million tons of grains and oilseeds, while exports in the 2022/2023 season amounted to about 58 million tons. Of these, more than 29 million tons were exported through the Black Sea ports under the Grain Initiative, about 15 million tons through the Danube ports, and approximately 14 million tons by rail and road.

Forecasts for this year show an increase in yields to 69 million tons of grains and oilseeds, and exports in the 2023/2024 marketing year are expected to reach about 45 million tons. In addition to grain, Ukraine exports about 9-10 million tons of oil and meals annually.

Due to the disruption of the Black Sea Grain Initiative by the Russian Federation, Ukraine faces the need to further increase the capacity of the Solidarity Routes by 1-1.5 million tons of grain per month, as specified in the AA.

In order to develop these alternative routes, the Ukrainian Grain Association proposes that the European Commission actively support this initiative. It is noted that some of the "Solidarity Routes" are characterized by the complexity and cost of logistics compared to other routes, which leads to a difference in cost of 30 to 40 euros per ton. Therefore, the UGA calls on the EU to create "green corridors" for Ukrainian agricultural products.

The UGA also recommends that sanitary, phytosanitary and veterinary control of grain transportation to the seaports of the Baltic States, Germany, the Netherlands, Croatia, Italy and Slovenia should be carried out in the country of destination. This will help to significantly increase exports and promote the development of the industry.

Finally, the EBA asks the European Commission to introduce subsidies to compensate European carriers for additional logistics costs of transit transportation and partial compensation to European ports for the so-called port costs of Ukrainian grain. This will help to stimulate exports and strengthen cooperation between Ukraine and the European Union in the field of agriculture and trade.