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Export routes for Ukrainian grain via Baltic ports as an alternative to shipments via the Black Sea – following Russia’s withdrawal from the Black Sea Grain Initiative (BSGI) – would only work with European Union (EU) subsidies to cover additional logistics costs, AgriCensus quoted trade sources as saying.

On 17 July, Russia withdrew from the BSGI, which had allowed for the safe passage of 33M tonnes of grains and other foodstuffs from Ukrainian ports since it came into effect last July.

The BSGI was brokered by Turkey and the United Nations (UN), following Russia’s invasion of Ukraine last February and its subsequent blockade of Black Sea ports.

Since leaving the BSGI, Russia had focused its attacks on Ukrainian ports and grain terminals as well as assets on the Danube River, which were providing alternate export routes for grain, World Grain wrote on 25 July.

The attacks by Russia had increased concerns around future shipments from the Danube – currently the key route for agricultural products after the BSGI stopped working – leading to alternative routes being considered, including transit through Baltic and Polish ports, AgriCensus wrote.

However, trade sources were quoted as saying this route was currently not workable, mainly due to associated high costs.

“This option can work if you go through Belarus (which will not happen) or if there will be subsidies from the EU for transportation to more distant ports (which is currently being discussed),” AgriCensus quoted one analyst as saying.

Other issues included the different rail gauges of EU and Ukrainian railways, and limited capacity at the border – Ukrainian rail shipments stood at 1.2M tonnes/month last year before the opening of the Black Sea export corridor – AgriCensus wrote.

The Ukrainian Grain Association (UGA) has proposed increasing grain exports to third countries by 1M-1.5M tonnes/month through “solidarity lanes” from Ukraine via the ports of the Baltic States (Klaipeda and others), Germany (Rostock, Hamburg), the Netherlands (Rotterdam), Croatia (Rijeka), Italy (Trieste) and Slovenia (Koper).

These routes were not often used due to the complexity and cost of logistics compared to other routes, the UGA was quoted as saying.

Against this backdrop, the UGA had asked the EU to introduce subsidies for European carriers and ports to meet these increased costs of around €30-40/tonne and had also proposed transferring sanitary, phytosanitary and veterinary control from checkpoints on the border with Ukraine to the destination country.

The UGA said it expected exports of Ukrainian grain and oilseeds in the 2023/24 marketing year to total around 45M tonnes, with an additional 9M-10M tonnes of oil and meal.