Ukraine has appealed to the European Union not to extend temporary import curbs on its grain and oilseeds that are due to expire on Monday. The EU in late April effectively ratified import curbs imposed by a group of Eastern member countries led by Poland. Is the gamble worth it? Reportedly, it was an attempt to clear a massive supply glut that built up after Russia invaded Ukraine last year and blockaded the agrarian nation’s main export route to the world markets via the Black Sea.
At a European summit in Moldova, Ukrainian President Volodymyr Zelenskyy urged the EU to unconditionally lift export restrictions on Ukrainian agricultural products. Ukrainian Agriculture Minister Mykola Solskyi told POLITICO there is a very big risk that Russia would take advantage of discord in the bloc to disrupt the UN-brokered deal that has allowed some Ukrainian shipments through the Black Sea.
Russia’s invasion of Ukraine and blockade of its Black Sea ports in February 2022 trapped grain stocks in the country, one of the world’s biggest exporters, and pushed up global food prices. The EU set up overland corridors through Eastern Europe in March. In July, the UN and Turkey brokered a Black Sea grain deal to allow safe passage for some Ukrainian shipments through the Black Sea.
Since the EU’s solidarity lanes were established, imports of Ukrainian agricultural products into Bulgaria, Hungary, Poland, Romania, and Slovakia have soared, reportedly distorting local markets. Farmers and commodity traders, eyeing rising food prices, also hoarded grain, growing the glut.
On April 15, the governments of these countries, led by Poland, introduced bans on certain Ukrainian agricultural exports. The Commission then negotiated a compromise that effectively legalized the bans and offered the countries cash. Poland, the homeland of EU Farm Chief Janusz Wojciechowski, is the biggest recipient.
Wojciechowski said at Tuesday’s Agrifish Council that the restrictions should be extended at least to October, to allow the five countries to clear the decks. “Without these measures, we will have a huge problem during the harvest in these frontline member states”, he told journalists.
In 2022, Ukraine exported about €7 billion worth of agricultural products to neighboring countries, around half of which was grain. Pointing the finger, Solskyi said that Wojciechowski’s push for the extension is driven by Polish domestic politics. Ukraine’s exports meanwhile are expected to fall by about 40 percent this year. A widely held view in EU policy circles wows that the farm commissioner, a senior figure in Poland’s ruling party, is backing his home team ahead of a general election due this fall.
Ukraine may be forced to impose retaliatory measures against Poland if the grain import curbs are extended, Deputy Economy Minister Taras Kachka said. “We may block imports of Polish cheese to Ukraine”, Kachka told POLITICO. Adding, however, that “now is not the time for trade wars when we have actual war”.
The much bigger problem is the Black Sea grain deal, Solskyi explained.
Ukraine’s Black Sea ports remain the biggest export route for agricultural products. More than 30 million tons of grain have so far been exported under the initiative, easing pressure on global food prices and staving off starvation for countries in Africa and elsewhere bearing the brunt of the world’s food crisis.