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. Last Updated: 07/27/2016

Ukraine Ports Tying Up Exports

KIEV -- Masses of red tape and a lack of transparent procedures at ports in Ukraine are hampering export capabilities at a time when Moscow and Kiev hope to boost sales, analysts and traders said Wednesday.

They cast doubt on official pronouncements that Ukraine could potentially export at least 22 million metric tons of grain and some said chaos at the country's numerous ports could allow exporters to sell only about 14 million to 15 million tons.

Analysts say Ukraine's hopes to transport about 17 million tons of Ukrainian, Russian and Kazakh grain through its ports this season.

Agriculture Minister Alexei Gordeyev said earlier this week that Russia would boost grain exports to between 7 million and 8 million tons from 5 million tons last year.

But Ukraine will have difficulty exporting if the country fails to ease red tape and establish more efficient procedures.

"The only thing that Ukraine needs to do to increase grain export through ports is to keep order there. Bureaucrats and a laxness typical of all former Soviet states cripple this sector," one Ukrainian trader said.

Experts say some Ukrainian ports operate obsolete Soviet equipment that makes simple processes such as loading a marathon task.

"In a developed country, a 50,000-ton ship is loaded up in hours, while it takes days in the majority of our ports," another trader said.

Traders also said they needed about 10 days to collect all the necessary documents in order to export grain.

"We have very attractive locations," said Serhiy Feofilov from UkrAgroConsult, the country's leading consultancy.

"Our ports could work almost the whole season, but now we cannot take advantage of it because of the lack of order there."

Officials say the picture is brighter and hope that after a bumper harvest this year of about 37 million tons clean weight, Ukraine could become one of Europe's leading exporters.

Ukraine itself plans to export at least 12 million tons of grain this season, compared with 9.2 million a season ago.

About 90 percent of exports would be transported via ports.

"Our ports are able to export 1.8 million tons of grain per month or about 22 million tons per year," said Elbrus Abdulayev, Ukraine's deputy transport minister.

"In September we were near this level, exporting about 1.6 million tons," he said.

Other officials say Ukraine has doubled its grain storage capacities at its 21 sea and eight river ports during the past season to more than 1 million tons.

Ukraine's leading Black Sea ports in Iliychivsk and Odessa built two new loading facilities in 2001 and 2002 and now they can export about 6.4 million tons of grain per year.

But other officials say they are not processing at capacity.

"Our capacity stands at about 1 million tons per year, while we processed only about 150,000 tons of cargoes so far this year," said an official from Azov's Berdyansk port.

He said the level of grain exports depended on whether the railway delivered the grain on time.

Ukraine's railroad has 11,420 grain wagons able to transport 2.6 million tons of grain per month or 31.2 million tons of grain per year, but about 50 percent of the wagons are usually standing near port silos, and unable to be unloaded in a hurry.

"More than 95 percent of our grain transports are spontaneous," Abdulayev said. "We often do not know how many wagons we will need."

Port officials say this causes a serious delay in ship loading and reduces the amount of exports.

"Usually a ship must wait some time because grain wagons cannot arrive in the port due to a huge number of stationery wagons near the port," said Olexiy Selik, deputy head of the port in the Black Sea city of Odessa.

Abdulayev agreed, saying: "In September more than 5,000 wagons loaded with grain were just standing near our ports due to the lack of a proper delivery schedule.

"It caused a significant delay in the ships' departure. Ports have developed their capabilities but they have forgotten to build new railroad facilities."