Minister of Agricultural Policy and Food Taras Vysotsky has asked agricultural and food companies to provide data and calculations for the negotiations. At the same time, according to him, Ukrainian exporters should make the most of all existing opportunities and available tariff preferences.
During consultations with the sector, rail and port transport and available export possibilities were also discussed. Ukraine is also exploring new options stemming from trade agreements with the United Kingdom, Switzerland, and Norway.
Port Blockade
Ukraine’s desire to increase access to foreign markets comes at a difficult time for agricultural exports. Exports via the Black Sea have been severely disrupted by Russian attacks on ports, ships, and infrastructure. In August, no ships called at the ports near Odesa.
Promotion
In the first twelve days of August, Ukraine exported approximately 590,000 tons of agricultural products. According to Minister Vysotsky, this is only about 30 percent of the required amount. If the ports remain blocked, alternative routes can at most handle about half of the normal export potential, he said.
Left Behind
As a result, around 30 million tons of Ukrainian agricultural products risk not reaching the international market. Currently, about 45 percent of exports go by rail and another roughly 45 percent via the Danube. The remaining 10 percent is transported by road. These alternative routes also have limitations.
According to Vysotsky, the Danube can eventually process about 1.5 million tons per month. However, the current water level must rise for this to happen. Moreover, these routes are also vulnerable: Russia attacked Izmail on the Danube last week. Ukraine is therefore also asking international partners for partial compensation for the additional transportation costs.
No Ceasefire
Kiev is meanwhile trying to reduce attacks around the Black Sea. Ukraine has proposed through a third party to Moscow to mutually stop attacks on civilian ships and facilities. Russia has rejected a ceasefire and also opposes a Turkish proposal for a moratorium on military operations in the area.
The ongoing Russian attacks increase risks for ships and lead to higher transportation and insurance costs. This also affects the grain trade. The problems around the Black Sea make alternative routes increasingly important, while those very routes lack sufficient capacity to fully replace the large Ukrainian seaports. Consequently, part of the harvest risks remaining unused.