Grain corridor shifts to Danube ports, carriers await tariffs from Moldova

The blockage of the grain corridor set up under the Black Sea Grain Initiative has shifted the direction of rail shipments towards Ukraine’s Danube River ports, and tariffs are being discussed with Moldova.

Source: Valerii Tkachov, deputy head of the Commercial Department of Ukrzaliznytsia (UZ), the Ukrainian national railway operator, during a meeting with cargo carriers, as reported by Interfax-Ukraine

Interfax-Ukraine is reporting, citing Tkachov, that the ineffective operation of the grain corridor has led to a decline in rail shipments to the Greater Odesa sea ports [Odesa, Chornomorsk and Pivdennyi – ed.].

"Four to six vessels are inspected here weekly, but yesterday not a single one was inspected, and today they are being blocked in various ways. If the corridor is working, it’s working very badly," Tkachov reported.

"Nobody can say for sure whether the Black Sea Grain Initiative will operate, but my personal forecast is that it’s 90% likely that the corridor will either be closed or will continue to operate as inefficiently as it does now," he added.

Meanwhile, Tkachov said, cargo traffic in the direction of the Danube ports of Izmail and Reni has increased. Carriers are currently waiting for new tariffs to be announced by the Moldovan railways.

Tkachov reminded carriers that tariffs for rail transit shipments through the Republic of Moldova are currently 57% higher than those charged by UZ. They have risen by 8-11% since 1 July [8% is the basic increase, plus 3% in connection with changes in the Swiss franc exchange rate, which Ukraine and Moldova use for payments – ed.].

Tkachov noted that Moldova has suggested that Ukraine update its tariffs for the transportation of agricultural products. However, UZ has yet to decide on the principles for applying a discount (based either on a classification that applies to all freight forwarders, or per individual carrier) and how it should be calculated (monthly or quarterly).

"We have set out a number of methodological questions in writing and will send a request to our Moldovan counterparts," Tkachov reported, adding that the Ukrainian side is considering the possibility of providing discounts for transit cargo shipments for Moldova.

Background:

Russia’s Foreign Ministry declared on 4 July that it does not deem it possible to continue contributing to the Black Sea Grain Initiative, which was signed last summer to enable grain to be exported from Ukrainian ports.

The Financial Times reported earlier that the EU is considering a proposal to set up a subsidiary of the sanctioned Rosselkhozbank (Russian Agricultural Bank) in order to keep the grain deal going. Olha Trofimtseva, Ambassador-at-Large of Ukraine’s Foreign Ministry, has been critical of the proposal.

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