Ukrainian Grain Association asks EC to create green corridors, compensate transit of Ukrainian grain for European carriers, ports

MOSCOW. July 24 (Interfax) - The Ukrainian Grain Association (UGA) has proposed to the European Commission (EC) to create green corridors and increase exports via the Solidarity Lanes by 1 million to 1.5 million tonnes per month, while compensating part of the costs of European carriers and ports that transit Ukrainian grain, Ukrainian media reported, citing the association's press service.

"This will lead to a significant reduction in the cost of grain transportation and will enable Ukrainian farmers to profitably export grain surplus to countries that need Ukrainian grain and stabilize global food security," the UGA said in its official appeal to European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis.

UGA said that in 2022 Ukraine harvested more than 73 million tonnes of grain and oilseed crops, while exports in the 2022-23 season reached almost 58 million tonnes. Over 29 million tonnes of grain and oilseeds were exported through Ukrainian Black Sea ports under the Grain Initiative, a little more than 15 million tonnes through Danube ports, and about 14 million tonnes by railway and trucks.

"This year Ukrainian producers can harvest about 69 million tonnes of grain and oilseed crops, the expected export volume in the 2023-24 marketing year can be about 45 million tonnes. Of course, additionally Ukraine also exports oil and meal, about 9-10 million tonnes per year," the forecast said.

The association said that after the termination of the Black Sea Grain Initiative, Ukraine faced an urgent need to additionally increase the capacity of the Solidarity Lanes by about 1 million to 1.5 million tonnes of grain per month.

UGA believes that this can be done by exporting grain through the ports of the Baltic States (Klaipeda, etc.), Germany (Rostock, Hamburg), the Netherlands (Rotterdam), Croatia (Rijeka), Italy (Trieste) and Slovenia (Koper). The EC is actively supporting the development of these routes.

"These routes are not used much due to the complexity and cost of logistics compared to other routes. The price difference is approximately 30-40 euros per tonne," the business association said.

UGA asks to introduce "green corridors" for Ukrainian agricultural products to the seaports of the Baltic countries, Germany, the Netherlands, Croatia, Italy, and Slovenia.

In order to ensure a significant increase in exports, it is necessary to transfer sanitary, phytosanitary and veterinary control from checkpoints on the border with Ukraine to the territory of the country of destination, the association said.

It is also necessary to introduce EC subsidies to compensate European carriers for additional logistics costs for transit transportation and to partially compensate European ports for the port costs for Ukrainian grain.