Wheat exports at war: how can Ukraine trade without a port?

When Moldovan President Maia Sandu recently gave her first interview since the start of the Russian invasion of Ukraine, the main focus was on the enormous inflation to which Europe's economically weakest country is exposed as a result of the war in the neighboring country.

Moldova is also suffering from inflation because no country has taken in more Ukrainian refugees in relation to the size of its population.

One reason for the price increases is the failure of the port of Odessa in Ukraine, which is important for the entire northern Black Sea region.

Michael Martens

Correspondent for Southeast European countries based in Vienna.

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Although Odessa is not occupied by Putin's troops, it is blocked by the Russian Black Sea Fleet.

Economically, at least, it comes down to almost the same thing.

It's not just Ukraine that's hit hard.

Odessa was also the most important gateway to the world for the Republic of Moldova, a state without access to the sea.

The closest point for imports and exports by sea is now the Romanian Black Sea port of Constanta.

It is connected to Western Europe and the North Sea via the Black Sea-Danube Canal, opened in 1984 during the reign of communist dictator Nicolae Ceaușescu.

But can Constanța make up for the region's loss of Odessa?

In an interview with the FAZ, Sandu said: "Our companies have already reoriented to Constanța, but that means longer transport routes, longer waiting times at the border and therefore higher costs overall.

We need more bridges to Romania and an expansion of the capacities for handling border formalities.” Sandu noted that these are all tasks that previous Moldovan governments should have done long ago and asked rhetorically: “Why don’t we have a connected power grid, why are they Road connections so bad, why was the gas pipeline with Romanians only recently completed?”

Infrastructure was neglected

The President refrained from answering.

It should have read something like: because previous Moldovan governments were either corrupt or looked to Moscow, often both.

There was no money left for the expansion of the infrastructure, where elected crooks stuffed their pockets and at best maintained connections with the old gentlemen in Moscow.

For example, there is still no motorway between the Moldovan capital Chișinău and Iași, the center of the Romanian region of Moldova, or even a well-developed expressway.

The rail connection is also in poor condition, trains as well as track systems.

The neglect of the infrastructure (although also on the Romanian side) now makes it more difficult to use Constanța as a replacement for the temporarily absent Odessa.

This could even have global consequences in terms of nutritional policy.

At the end of March, Ukraine announced that it was negotiating with Romania about the export of Ukrainian wheat, vegetable oils and other agricultural products via Constanta.

Before the Russian invasion, Ukraine exported more sunflower oil than any other country in the world and is one of the largest exporters of wheat.

After the announcement from Kyiv became public, Romanian media reported that the poor rail connection to the main Romanian port could prove to be a bottleneck.

However, the sales growth promoted by the war in the Ukraine would probably have brought some burdens with it, even with a well-developed infrastructure.

According to Romanian data, cargo handling in Constanta increased by 23 percent in March of this year compared to the same month last year.

There are studies on expanding the port's rail connection, but implementation will take time.

Maia Sandu also confirmed this to the FAZ: “Fortunately, we have excellent relations with Romania.

Many important projects are on the way.

But it will take time to realize them.”

Approaching Moldova to Romania?

One reason for the complex transport is the different track widths of the railways.

Moldova and the Ukraine, as former areas of the Tsarist Empire, use the larger Russian track, in Romania the same level that is also largely the case in Western Europe applies.

Also for such reasons, the export of wheat from Ukraine via Constanta is at least three times more expensive than the previous export via Odessa, not to mention the inflation of energy prices.

In the long term, a stronger orientation of Moldova's export economy towards the port of Constanța could lead to Moldova getting even closer to Romania.

Such a trend has existed for a number of years anyway.

It is reinforced, among other things, by the comprehensive free trade agreement between the EU and Moldova, which was signed in 2014 and came into force in summer 2016.

Since many Moldovans have Romanian passports with which they can settle in the EU, the importance of European labor markets for the country has increased significantly in recent years.

According to Moldovan figures, more than 200,000 Moldovans are still working as guest workers in Russia, but their number is falling, as Maia Sandu confirms: “Their importance for our economy has decreased significantly in the past five years.

Up to 50 percent of remittances used to come from Russia, now it's only twelve percent.

So we are less vulnerable than we were a few years ago.”

In the long term, the Russian war against Ukraine could reinforce Moldova's tendency to turn away from Russia - apart from the pro-Russian part of Transnistria.

One consequence of the Russian aggression is an unintended support program by Moscow to expand Moldova's transport links to Romania.