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Brussels’ masterplan to get Ukraine’s grain moving

The European Commission is in a race against time to help shift Ukraine’s grain.

Russia’s invasion is blocking Ukraine’s access to the Black Sea ports that normally take about 90 percent of food exports and the country needs to move millions of tons of grain to earn crucial cash and to prevent a food crisis in areas like the Middle East and Africa.

The European Commission is stepping with its EU-Ukraine Solidarity Lanes strategy — obtained in advance by POLITICO and unveiled formally on Thursday — to unblock borders with Ukraine and boost capacity on road and rail routes to export Ukrainian grain, while also sourcing vessels and free warehouse capacity inside EU countries to store excess produce.

“Ukraine is currently storing around 40 million [metric tons] of grain, and half of that must be exported by the end of July,” said Transport Commissioner Adina Vălean while unveiling the plan. “The problem we are trying to solve is in no way regional or European, but global.”

Vast amounts of Ukraine’s grain is stuck in silos because access to ports like Odesa and Mariupol is closed. The July export deadline is both because the grain is needed to meet demand but also to free up silo capacity for the next harvest.

It’s also a big deal for Ukraine’s shattered economy as around three-quarters of grain production is sent abroad, accounting for around a fifth of the country’s export revenue.

“In order to absorb to the greatest extent possible the volumes that had previously gone via Ukrainian seaports, all transport modes have to be mobilized to the maximum capacity,” the strategy states.

Clearing bottlenecks

That’s easier said than done.

Average waiting times for train wagons waiting to cross into the EU are currently 16 days at border points between Ukraine, Poland and Romania, while at some places it runs to a month, said Vălean.

That’s because Ukraine’s railways use a wider gauge than its EU neighbors, which means either freight needs to be reloaded to wagons able to run on the narrower European gauge or else the wagons have to be lifted onto European-gauge undercarriages in a time-consuming process that involves specialized machinery.

The Commission’s strategy is aimed at coordinating a massive logistical push to relieve those bottlenecks.

Vălean said she’s asking national authorities to prioritize the export of grain above other traffic, and calling on EU countries to finally approve her request to temporarily allow more Ukrainian and Moldovan truckers to enter EU countries.

Ukrainian soldiers inspect a grain warehouse earlier shelled by Russian forces on May 6, 2022 near the frontlines of Kherson, Ukraine | John Moore/Getty Images

The Commission will also play matchmaker to help companies source more wagons, trucks, barges and tank containers by calling on industry associations to get involved.

It’s unclear if the EU’s plan will help rein in runaway food prices, as Vălean stressed that the Commission was only stepping in to facilitate what was primarily a “market-driven situation.”

“We are not in the business of agricultural export,” she said. “What we trying to do here is to increase the transport offer and put together supply and demand.”

The scale of the challenge is huge. Earlier this month, a ship carrying 70,000 metric tons of Ukrainian cereals left the port of Constanța in Romania — it had to be supplied by 49 barges and trains running across the border. The Commission aims to move almost 300 times that much freight in less than three months.

“If you do the maths, you will see that an astonishing 10,000 barges and almost 300 large ships are needed to carry 20 million metric tons of grains,” said Vălean.

It’s not just the availability of trucks and rail cars that will make that difficult. For example, transit along the Danube River into Romania is restricted by a shortage of qualified maritime pilots, Romania’s Economy Minister Florin Spătaru told POLITICO.

“We have our own difficulties on making the flow of goods smoother,” said Spătaru. “This is an opportunity for the Romanian economy, while also helping the Ukrainian economy.”

In the meantime, Poland is focusing on connecting Ukrainian exports to its own ports, like Gdynia and Gdańsk on the Baltic Sea, according to its Deputy Prime Minister Henryk Kowalczyk.

Looking further ahead, the Commission is thinking about expanding its strategic infrastructure corridors, dubbed TEN-T, into Ukraine. Such an initiative won’t have an immediate impact, but it will make European gauge railways in Ukraine and Moldova eligible for billions in EU funding.

This article is part of POLITICO Pro

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