Ukraine is exploring the use of Baltic Sea ports for grain exports, the agriculture ministry said on Wednesday, following a similar move by Russia as both sides seek alternatives to Black Sea routes disrupted by their war.

Sources have told Reuters that Russian companies are repurposing fertiliser, coal, and other cargo terminals at the country's Baltic and Arctic ports to handle grain exports after Ukrainian drone attacks disrupted shipments through the Black Sea.

Most Ukrainian cargo, including grain, has been rerouted through the country's three Danube river ports after Russian attacks effectively blocked its Black Sea ports, which previously handled 90% of exports.

But this adds about $50 per metric ton in logistics costs, making Ukrainian grain uncompetitive, and has created bottlenecks.

HIGH COST, DIFFICULT LOGISTICS

"Baltic ports could potentially handle exports of up to 20 million tons of grain," Ukraine's agriculture ministry said in a statement after a meeting between the Ukrainian and Estonian agriculture ministers.

Transport via the Baltic, however, would add about $100 per ton to export expenses, the ministry said.

To offset this, Ukraine would need up to $2 billion in international support, it added.

The ministry did not identify a potential source of funding or explain how grain would reach Baltic ports.

Ukraine does not border the Baltic states, making transit through Poland the most likely route.

Ukraine shipped grain through Poland in 2022 and 2023 during the early stages of the war. The route triggered large protests by Polish farmers, who argued that cheaper Ukrainian grain threatened domestic producers.

Ukraine still exports grain via its eastern European neighbours, but volumes remain relatively low. Only about 340,000 tons were shipped through those routes in the first half of September, according to rail operator Ukrzaliznytsia.

As of mid-September, 278 grain wagons per day were being dispatched to Eastern Europe, including just 65 bound for Poland.

Ukraine exports grain via Poland, Hungary, Romania and Slovakia.

(Reuters)