Latvian food producers could lose 30 mln euros in a month due to blockade of Ukrainian-Polish border
RIGA. Nov 27 (Interfax/BNS) - The blockade of checkpoints on the Ukrainian-Polish border could lead to losses for the Latvian food industry of 30 million euros within a month, Inara Shure, chairman of the board of the Latvian Federation of Food Companies (LFFC) told BNS.
The current situation has already significantly affected the food industry in Latvia, she said. Ukraine is an important partner for Latvian enterprises both in terms of finished goods exports and raw material supplies. The situation on the border between Ukraine and Poland is now unpredictable; transportation times have increased from two days to several weeks.
Exports to Ukraine are significantly delayed, and food manufacturers are in the dark about the timing of deliveries of raw materials, which, in turn, affects production and causes penalties for unfulfilled contracts, Shure said.
To assess the impact on the food industry of the situation on the Ukrainian-Polish border, the LFFC contacted only the largest Latvian producers who are the main exporters of products and recipients of raw materials from Ukraine. In the industry as a whole, the situation could be even worse.
"Of course, manufacturers are looking for solutions, looking for new markets for the supply of raw materials, but it is obvious that in other countries prices for raw materials will be higher than in Ukraine. This means that manufacturers will be forced to increase prices for products, which will cause another round of inflation, because the politicians aren't doing their jobs," the LFFC chairman said.
While the industry expects the Latvian Ministry of Foreign Affairs (MFA) to work quickly, decisively and effectively, it does not currently appear that the responsible institutions are looking for solutions, she said.
"This is the economy of Latvia we're talking about, so our experts on European affairs and relations, the Ministry of Foreign Affairs, must confirm its political wherewithal and immediately find a solution to this emergency situation in its negotiations with Polish officials, since the damage to the Latvian economy is growing every day," Shure said.
Traffic through three checkpoints on the Ukrainian-Polish border - Yagodin-Dorohusk, Krakovets-Korczowa and Rava Ruska - Hrebenne - has been partially blocked since November 6, due to a protest by Polish carriers. It was originally due to end on December 3, then January 3. The blockade of the Yagodin-Dorohusk crossing point on the Ukrainian-Polish border has been extended until February 1, 2024, Rafal Mekler, the leader of the Polish truckers blocking the border, said on social media on Wednesday.
As of November 22, the blockade extended to a fourth border checkpoint, Shehyni-Medyka, and later the State Customs Service of Ukraine reported that a blockade of a fifth checkpoint, Nyzhankovychi-Malhowice, could not be ruled out. Queues for entry in front of blocked checkpoints on the Polish side stretched up to 40 km.
The situation for the Ukrainian agro-industrial complex, which exports more than 70% of its agricultural products, is becoming dangerous in light of problems with transportation through Poland, Ukrainian First Deputy Agrarian Policy and Food Minister Taras Vysotsky said last week.
One of the Polish protest organizers' primary demands is a return to the practice of issuing permits for Ukrainian cargo carriers (which was abolished under the current "transport visa-free" regime) and a reduction in their number to the level prior to February 2022, when up to 200,000 thousand permits were issued per year. In addition, carriers want empty Polish trucks returning from Ukraine to Poland to be able to cross the border without waiting in line for days. Polish carriers are also demanding stricter transportation rules under ECMT multilateral permits. According to a number of representatives of the Polish transport industry, the work of Ukrainian carriers on the European market is causing a collapse in tariffs for cargo transportation.
Ukrainian carriers transport goods mainly from/to Ukraine, and not between European countries. Their work cannot influence freight rates in Europe. At the same time, most of the demands from Polish carriers, according to the Ukrainian side, are impossible to fulfill. Negotiators on the Ukrainian side expect that a decision to unblock the border will be reached after the appointment of a new government in Poland following the results of the recent elections, which is expected by mid-December.
On November 25, Latvian Foreign Minister Krisjanis Karins, in a telephone conversation with Polish Minister for EU Affairs Szymon Szynkowski vel Senk, called for a solution to the situation on the Polish-Ukrainian border, noting that Latvia is ready to participate and assist.