Export opportunities in 2024: maritime corridor, ship insurance and river logistics

Exports of goods and services from Ukraine are expected to grow by 9% in 2024. This was stated by the First Deputy Prime Minister of Ukraine, Minister of Economy Yuliia Svyrydenko.

According to her, positive developments in this area began to occur in the last months of 2023. The opening of an alternative maritime corridor, the launch of a ship insurance mechanism against war risks, and the establishment of river logistics on the Danube - all those contributed to this.

"Logistics continues to be the key to Ukrainian exports. Despite all the problems and challenges, Ukraine exported 99.8 million tonnes of goods. This is 112,000 tonnes more than in 2022. At the same time, the value of exports was 18.7% lower than a year earlier - USD 35.8 billion. This is one of the lowest figures for the last decade. It was the result of the challenges Ukraine faced last year - border blockades, grain disputes and russia's sabotage of the grain deal. However, thanks to timely and correct decisions, we managed to preserve our export capabilities and continue trading on international markets. Although the losses are quite significant," said Yuliia Svyrydenko.

The Minister also added that the Government was working to strengthen export logistics with air defence systems and to find new ways to export goods and services. This is the only way to ensure flexibility and manoeuvrability in the face of new challenges to maintain positive trends.

According to the Ministry of Economy, under current conditions, exports will grow in the coming years. By 9% in 2024, 19.4% in 2025 and 20.6% in 2026. The ultimate goal is to return the volume of exports of Ukrainian goods and services to the level of 2021.

According to Yuliia Svyrydenko, the foundation for increasing exports has already been laid. In August, Ukraine launched an alternative sea corridor. Grain, metal and other goods are now being exported through this route. As a result, exports by sea increased by 30.7%, or 7,340,000 tonnes, in December compared to November. In particular, metal exports increased by 40% for semi-finished products and 45.3% for flat products.

Another important decision to increase exports was the introduction of a unique mechanism for insuring ships against war risks. It also reduces the cost of grain shipping insurance by up to 1-1.25%. The Ministry of Economy elaborated this mechanism together with international partners. On the part of Ukraine, the Export Credit Agency provides budgetary coverage for insurance guarantees.

The mechanism is already in place. Exporters can apply for risk coverage to insurance companies with which they have concluded agreements or directly to the insurance broker Marsh McLennan.

Last year, river logistics was also developing in Ukraine. The capacity of the Danube was increased, and the transit of Ukrainian goods through neighbouring countries grew. Plans for 2024 include further investment in this area. According to Yuliia Svyrydenko, using Romania as an example, our country has an ambition to double transit to this country - up to 4 million tonnes per month.

At the same time, land routes remain an important logistics area for Ukrainian exporters. For them, Europe is primarily a transit opportunity to trade with countries in Asia, Africa and the Americas. There is no alternative for now.

"Thanks to joint efforts with our partners, last year we extended fully duty-free access to the EU markets. And we are working together to ensure that this regime is maintained until we join the EU. This is how we faced difficulties on the western border. Due to the Polish blockade, exports by road decreased by 18.3% in December compared to November. However, the year-to-date decline was only 0.7%. Official and unofficial negotiations are ongoing. So far, the result has been rather restrained, but all parties are determined to find a solution, as the terms of transportation must be in line with the scale of trade between Ukraine and the EU," the Minister said.

Yuliia Svyrydenko also reminded that in 2023, Ukraine signed a number of agreements that improve the access of our producers to foreign markets. These include a digital trade agreement with the UK, as well as updated agreements with Canada and Turkey. Both are now at the stage of ratification. And soon there will be an official announcement of the successful completion of negotiations with the UAE.