Grains

US believes there are many alternative routes for Ukrainian grain exports

Aug, 17, 2023 Posted by Gabriel Malheiros

Week 202334

The U.S. is in talks with Turkey, Ukraine and Kyiv’s neighbors to increase the use of alternative export routes for Ukrainian grain, officials said, after Russia pulled out of an agreement that guaranteed the safety of food shipments across the Black Sea.

The U.S.-backed plan involves increasing the capacity for Ukraine to export four million tons of grain a month via the Danube River by October. Much of the grain would be sent down the river and via the Black Sea to nearby ports in Romania and shipped onward to other destinations. Though slower and more expensive, the route would work as an alternative to a Black Sea shipping corridor established last year under an agreement with Russia, Turkey, and the United Nations.

Russia withdrew from the deal in July, bringing a halt to Ukraine’s exports from three ports around Odesa and setting in motion an escalating conflict in the Black Sea. Russian forces have unleashed a wave of missile and drone strikes on Ukrainian ports in recent weeks and boarded a commercial ship heading to Ukraine on Sunday.

The effort to increase Ukraine’s export capacity via the Danube is taking place in parallel to Turkish and U.N. efforts to coax Russia back into the grain deal, officials said. Turkish President Recep Tayyip Erdogan, who helped broker the agreement last year, is under pressure to revive the deal before harvested Ukrainian grain starts piling up in early September, diplomats said.

The U.S. is considering all potential options, including military solutions, to protect ships headed to and from Ukraine’s Danube ports, the Washington official said but declined to give specifics on those options or say what countries would be involved in them.

Senior U.S. officials discussed the effort with leaders from Ukraine, Moldova, and Romania—a member of the North Atlantic Treaty Organization—at a meeting in the Romanian city of Galati on Friday, the State Department said. Romania’s transportation minister told reporters afterward that his country would double its capacity for grain exports to four million tons a month.

Russia has once again attacked a grain deposit in the grain sector in the Odessa region, southern Ukraine, local authorities said this Wednesday (16). Moscow used drones in attacks on storage facilities and ports along the Danube River, which Kyiv has increasingly used to transport grain to Europe after the Russians broke a Black Sea export agreement.

The Ukrainian economy, severely damaged by the war, is very dependent on the agricultural sector. Its exports in this segment, which once also headed for Russia, are an integral part of the wheat supply chain, with a prominent role also in sunflower oil, barley, and other food markets, especially for developing nations. A month ago, however, the Kremlin decided to put an end to the deal signed last summer to allow the safe passage of commodities across the Black Sea. Alternative routes, like the Danube or rails, pose much higher costs.

Source: Jornal do Comércio

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