Poland Races to Help Ukraine Export Looming Wheat Harvest
WARSAW—With only weeks left before Ukraine’s wheat harvest begins in earnest, Poland is racing to speed up the flow of grain from its war-torn neighbor, scouring Europe for spare train cars and containers, throwing new customs agents onto a truck-choked border and dispatching political leaders to far-off countries desperate to secure new shipments from Ukraine.
The collective effort, described by Polish and Ukrainian officials and truck companies pitching in, is an attempt to help Ukraine export its wheat by land, circumventing Russia’s naval choke hold on Ukraine’s Black Sea shipping lanes. At best, Poland expects it could receive and reship one-third of the 4.5 million tons Ukraine would export monthly in peacetime, Poland’s Agriculture Minister
Henryk Kowalczyk
said Thursday. That would be twice the current volumes currently moving through Poland.
But first an inordinate amount of infrastructure and economic incentives have to be patched together, swiftly, before the wheat harvest gains speed near June’s end.
In Brussels, Poland has asked the European Commission to help find the myriad specialized cargo train equipment needed to transfer wheat off Ukraine’s Soviet-built rail lines, which are wider than Poland’s, and onto Polish trains. In Cairo, this week Polish President
Andrzej Duda
met Egyptian President
Abdel Fattah Al Sisi,
to coordinate shipments from Ukraine to Egypt, the world’s largest wheat importer.
On the Polish-Ukrainian border, both countries are scrambling to designate new lanes for wheat-bearing vehicles. Alongside them, miles-long lines of trucks are waiting nearly a week in some cases to cross through the three customs checkpoints now responsible for the bulk of Ukraine’s outbound trade.
“I am not tired of driving, but of waiting here,” said Anatoly, a 57-year-old Ukrainian truck driver delivering 22 tons of sunflower oil who declined to give his last name. After spending three days in line to cross the border from Ukraine’s town of Jagodyn into Poland’s Dorohusk, he was still several miles away from the customs control point.
“I have been transporting food products since the 1990s and this time now is the harshest for us. The lines have never been that long,” he added.
“‘I have been transporting food products since the 1990s and this time now is the harshest for us. The lines have never been that long.’”
Ukraine normally exports about 10% of the world’s wheat—and nearly half its sunflower oil. Its inability to ship its crops to foreign markets has quickened the global pace of inflation, driven up food prices in some of the world’s poorest countries and aggravated the risks of famine in other conflicts such as Yemen and Ethiopia, the United Nations has said.
There are roughly 20 million tons of wheat sitting in storage in Ukraine, officials have said. Global wheat production is forecast at 774.8 million tons for 2022 to 2023, 4.5 million tons lower than in 2021 to 2022, according to the U.S. Department of Agriculture. Weather conditions in the U.S. and Europe may lead to reduced harvests as well.
Poland and Romania have stepped up to try to find alternative routes, a bid to shore up Ukraine’s ailing economy and help reassure wheat-importing developing nations that they won’t be second-order victims of the war. Romania’s exit route requires river barges leaving Ukraine via the Danube River, and continuing on to Romania’s Black Sea port of Constanta. But that waterway has already become congested.
Lithuania has offered its ports for Ukraine’s grain, which could travel by rail there, since the two countries’ Soviet-era rail lines are the same width—except that requires passing through Belarus, firmly in Russia’s camp. Slovakia also has road connections with Ukraine but no seaports.
Turkey has engaged Russia in talks to expedite shipments from Ukraine. Even in the unlikely event of a breakthrough, that leaves the delicate work of removing sea mines and sunken warships near Ukrainian ports before ordinary maritime traffic can begin. The price of wheat futures trading in Chicago, the global benchmark, rose 1.4% Thursday after declining the previous two days as traders reassessed how much that effort would realistically deliver.
That has left Ukraine—and the global wheat supply—increasingly dependent on the amount of cargo that can be carried by road and rail through Poland. The Polish government, which expects the overland route may become a long-term arrangement, has offered to create space on its Baltic seaports for Ukrainian grain.
Doing so requires rapidly assembling the economic incentives and infrastructure to lure transport companies otherwise disinclined to pitch in.
Romania’s Black Sea port of Constanta is one option for Ukrainian exports, but that waterway has become congested.
Photo:
Nathan Laine/Bloomberg News
Russia has bombed roads and rail lines in Ukraine faster than Kyiv can repair them, including a major train tunnel near the Polish border hit by a Russian missile strike Wednesday. Truck companies have struggled to find insurance, a problem Poland and Ukraine are trying to resolve by creating a joint special purpose company to provide insurance and help finance truck equipment purchases, said Mr. Kowalczyk, the agriculture minister.
Truck drivers themselves are in short supply as well, as Poland depends on Ukrainian immigrants to fill those positions, a problem since some 80,000 Ukrainians in the European Union have returned home to fight, according to Ukraine’s border guards. With the Black Sea closed, much more than wheat alone is forced to enter or leave Ukraine by land, creating a scarcity of available trucks and pushing up transportation prices by about 30% since the war began, industry officials said.
“I am deploying every single available food truck we have,” said Mariusz Matusik, managing director at Krotrans Logistics, a company transporting liquid foods throughout Europe, who has been picking up at least three phone calls daily from Ukrainian farmers and entrepreneurs determined to secure transportation contracts for the millions of tons of their sunflower oil. “But we have been able to accept less than a half of these offers, since we are bound by other contracts.”
Once at the border, EU customs procedures remain in place, a bottleneck for checkpoints that weren’t set up to manage a wartime exodus of millions of tons of wheat. Before wheat shipments can be cleared, experts from four different sanitary institutions working at laboratories near the customs borders are running specific tests on samples to make sure the shipments meet EU quality requirements.
While Ukraine endures military assaults by Russian forces, analysts are warning that the world’s wheat supply could be severely threatened. WSJ’s Shelby Holliday explains. Photo: Valentyn Ogirenko/Reuters (Video from 2/24/22
One EU customs regulation requires considering whether radiation left over from the 1986 Chernobyl nuclear disaster could have polluted wheat currently crossing the border. Some shipments need one test, while others require a few of them. Each diagnostic consumes several hours, said one laboratory technician, working in a lab near a dayslong line of trucks awaiting clearance. Sometimes, he added, “there are viruses or bacteria which samples have to be forwarded to specialized laboratories.”
To speed matters up, Poland has put customs officers on rotating shifts, around the clock, through weekends.
Mariusz Nowak, owner of AgroNowak, a transport company trading and transporting grain, corn and canola for more than a decade, said he had already sat at a negotiation table with Ukrainian farmers interested in selling him his wheat.
“I am telling them: ‘Gentlemen, please bring the first two cars tomorrow, we will look at the quality of grain,’” he said. “But nobody has delivered anything so far. They are facing numerous barriers, such as necessary documents…and many other requirements. Apart from that, many cars are stuck at the border.”
—Alistair MacDonald and Yusuf Khan contributed to this article.
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