Thursday

2nd Feb 2023

EU seeks to ease Ukraine export woes

  • The UN's Black Sea Grain initiative was launched in July (Photo: JCC, OCHA)
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The EU is grappling with bottlenecks to increase the capacity of shipments of Ukraine grain and other products to member states.

But EU officials briefing reporters in Brussels on Tuesday (20 September) say efforts are underway to improve so-called solidarity lanes that aim to expedite Ukrainian goods towards EU states.

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The lanes were set up over the summer to expand logistic connections between Ukraine and the EU, via rail, road and inland waterways.

"While we have come a long way, we are also starting to see some capacity limits of these alternative routes," said one EU official.

Around 2.6 million tonnes of Ukrainian agricultural goods were exported via such lanes in August, an increase from 1.3 million compared to April, before the lanes were launched.

But several chokepoints along the Polish and Ukraine border are causing headaches for trucks that are attempting to cross.

The lack of scanners, parking lots, and staff at the border points are also issues that EU officials say can be easily resolved.

"We've received estimates from stakeholders that these waiting times account for about 40 percent of the total logistic costs," said another EU official.

But other big issues, such as adjusting rail lines in Ukraine to EU standards and gauges, are likely to take a long time as well as major investment.

One EU study on extending the European standard gauge line into Ukraine will not be ready until next year, for instance.

And while the EU lifted VAT and customs duty over the summer, it is not immediately clear if those will be prolonged.

Such lanes have led to accusations by Russian's president Vladimir Putin that the EU is keeping the grain for itself and not exporting to the rest of the world.

But EU officials counter that argument.

They note that prior to the war the main destinations for Ukrainian wheat were Egypt, Pakistan, Bangladesh, Morocco.

However, the EU has and continues to import its corn. But that is largely used as animal feed, they say.

That dependence may also increase in the EU given its own poor harvest for maize this year.

UN Black Sea Grain initiative

The UN had also in July brokered a Black Sea Grain initiative, leading to an additional 3.8 million tonnes of exports via 169 shipments to destinations around the world , including member states.

The UN plan also sends Russian food and fertiliser to global markets.

Such outbound voyages are documented and updated on a daily basis , including a recent shipment of some 69,000 tonnes of wheat to Spain.

The UN initiative has also seen four shipments for the World Food Programme, which sends the grain to crisis-hit places like the Horn of Africa and Afghanistan.

Meanwhile, EU's solidarity lanes still take up the bulk of the grain, at 61 percent of exports, compared to 39 percent via the Black Sea ports.

The combined total of the EU lanes and the Black Sea initiative have led to the export of some 14 million tonnes of agricultural products.

EU officials note that while the Black Sea initiative is temporary, their lanes also transport other goods like steal and are here to stay as part of a wider effort to fold Ukraine into the EU's single market.

The largest of those runs to Romania's port city of Constanța, which carries over 50 percent of Ukrainian grain exported to EU states.

New lanes are now set to be launched for the Baltic Sea, the Adriatic and the North Sea.

Ukraine is also set to accede and then phase-into the EU's custom transit convention in October.

The convention promises to reduce times spent on checks on transit goods.

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