Ukrainian grain transit via Lithuania can be long-term, but investment needed – PM - BNS INTERVIEW

VILNIUS – Prime Minister Ingrida Simonyte believes that Ukrainian grain transit through Lithuanian and other Baltic ports could become a long-term solution that would reduce geopolitical risks for Ukraine, but that this requires additional investment in infrastructure. 

Vilnius has stepped up its efforts to open up Ukrainian exports through Lithuanian, Latvian and Estonian ports after Russia decided in July to withdraw from an agreement that allowed Kyiv to export grain through the Black Sea. 

In a joint letter in late July, three Lithuanian ministers urged the European Commission to strengthen Ukraine's alternative grain export route through the Baltic countries.

Such shipments are now hampered by Ukraine's agricultural production being held up at its border with Poland because of Warsaw's fears that Ukrainian grain will enter its domestic market and drive down prices for local farmers’ produce.

Simonyte dismisses the fears as unfounded, saying that grain travelling in transit to a port would not enter the EU market and would not affect prices. 

"These shipments would have no impact on the domestic market, because that would be transit to a port and it would not affect trade within the EU, increase supply or affect prices in any way," the prime minister has said in an interview with BNS.

"One can guess that the internal discussion is so heated given Poland’s electoral calendar and that perhaps the government hesitates to make some quicker moves for political reasons, because we can hardly see any practical problems that would prevent us from doing it," she added.

Even if Poland agrees to moving customs and other checks of Ukrainian grain from its border with Ukraine to Baltic ports, they do not have the capacity to meet the entire transit demand, according to Simonyte. 

"In the long term, considering that Ukraine will probably need this support for a long time with serious investments, the Council of Europe Development Bank (CEB) could provide at least part of them," the prime minister said.  

"These investments, coupled with the acceleration of Rail Baltica processes, would considerably improve Lithuania's possibilities (to be a transit country for Ukrainian grain)," she said. 

"Thus, it is a question of what we want to solve," Simonyte said. "Do we want to solve now this momentary issue, where there are still physical constraints on how much we can help, or do we want to create a sustainable transit corridor, which then requires more serious investment than procedural ones?"  

"The second option would create very serious possibilities to remove a large part of the risk for Ukraine that Russia might in one way or another prevent it from feeding the world which depends on Ukrainian grain," she added.