23 August 2023

2 minute read

By: Global Ag Media

Europe

The European Commission's decision to compensate for the costs of delivering Ukrainian grain to European seaports will improve the ability to export Ukrainian food without interruption, Reuters reported, citing a senior Ukrainian official on Tuesday.

Ukraine is a major grain grower and exporter and normally ships millions of metric tons of food from its deep-water Black Sea ports of Odesa and Mykolaiv. However, it has had to rely on river ports and railways after Russia pulled out last month of an UN-brokered deal to secure global grain supplies while top exporters Ukraine and Russia remain at war.

Ukraine has said it can supply grain to seaports of Germany, Italy, Latvia, Lithuania, Croatia, Slovenia and the Netherlands for further export to final destinations across the world.

"It is impossible to guarantee global food security without Ukrainian grain," Taras Vysotskiy, the first deputy Ukrainian agriculture minister said in a statement.

He said that due to the blocked Black Sea ports, transporting Ukrainian grain to distant European ports had become very expensive for farmers.

"The Ministry of Agrarian Policy and the Government have appealed to the European Commission to compensate Ukrainian farmers for the cost of logistics in the amount of 30 euro ($32.55)per tonne," he said.

Such subsidies will be paid only for deliveries to distant European ports, he noted.

Sources told Reuters that the European Commission had no immediate funds in the budget and no clear way to help finance the extra transport costs Ukrainian grain exports will face with the end of the Black Sea deal.

Ukraine's grain exports have totalled 3.6 million metric tons so far in the 2023/24 July-June season as of Aug. 21.

Exports have been affected since Russia quit the grain deal but the ministry's data did not give a breakdown on exports since the deal collapsed.

($1 = 0.9217 euros)