A proposal by the Ukraine government to include metals in the list of goods allowed through the Black Sea Grain export corridor has received a lukewarm response from the grain sector, AgriCensus reported.
Building on the success of the existing corridor, which has seen millions of tonnes of corn, wheat, sunflower and other agricultural products being shipped, adding metal exports would be another major boost to the country’s economy as a result of the ongoing conflict with Russia, according to the 19 January report.
“We will focus on building more storage for agricultural goods, but what we need to do from a strategic point of view is to open sea ports. It’s not just about agriculture, it’s about steel,” Economy Minister Yuliia Svyrydenko told Bloomberg during an international forum held in the Swiss resort of Davos.
Traditionally one of the key strategic contributors to the Ukrainian economy, the metal industry has been impacted by the conflict in the country, following the destruction or occupation by Russian forces of its main processing facilities.
Prior to the conflict, metal products - along with grains - were exported mainly through Black Sea ports but since Russia’s invasion, the flow had switched to railways, trucks and small ports, leading to an increase in costs, AgriCensus wrote.
Allowing metals to be shipped from the Great Odessa ports - typically the three ports of Pivdennyi, Odessa and Chornomorsk - could potentially help minimise logistic costs and increase trade flow, according to the report.
However, the proposal received a lukewarm response from the grain trade, which believed the expansion of the corridor to include metals could bring challenges, the report said.
Grain trade representatives said that they currently did not see how it could be done as it was harder to make the case that metal exports had the same importance to global health as grains, AgriCensus wrote.
In addition, any agreement involving changes to the grain deal would have to be discussed with all interested parties including Russia which, as a major competitor to Ukraine in the metals industry, would be unlikely to agree to the proposal, the report said.
With every vessel using the grain corridor required to be inspected twice at Istanbul - once on the way in and again on the way out, another potential challenge could include exacerbating the reported bottlenecks of ships exiting the Black Sea.
