Farmers check stores of unsold grain at a farm in Sedziejowo, Poland, on Monday, April 17, 2023.
Bartek Sadowski | Bloomberg | beautiful pictures
Western nations have sought to help Ukraine maintain exports of vital grain and agricultural products since the war with Russia began, but trouble is brewing in Eastern Europe where there is a surplus of production. Abundant and cheaper Ukrainian products are considered to be detrimental to the interests of domestic suppliers.
After a wave of growing anger from their own producers, Poland, Hungary and Slovakia in recent days introduced a temporary ban on the import of grain and other agricultural products from Ukraine. , arguing that these have created competition and unhealthy trading conditions for local farmers. The import suspension will last until the end of June.
Bulgaria also said it was considering a ban while on Tuesday Romania’s ruling Social Democratic Party announced that they plan to ask the country’s ruling coalition to issue a temporary ban on imports of Ukrainian agricultural products to “protect Romanian farmers.”
Ukraine’s move to ban agricultural imports has angered the European Union, which has sought to help Kiev maintain exports as an economic lifeline for the war-torn country.
Ukraine is one of the world’s largest exporters of wheat, corn and sunflower products, and Russia’s blockade of its ports last year has caused global food prices to soar and shortages of one basic products, causing difficulties for poor countries.
An agreement between Ukraine and Russia allowing grain exports to leave the country via the Black Sea was brokered by the United Nations and Turkey, and this helped defuse the crisis. The EU also created the so-called “solidarity road” to support Ukrainian exports leaving the country via European land routes, as well as suspending the imposition of import duties on Ukrainian exports.
But countries in Eastern Europe now say logistical challenges and supply bottlenecks mean cheaper Ukrainian agricultural products have flooded into their countries and are not being shipped, putting pressure on institutions. storage facilities and forcing prices down. Farmers protested the situation, pressuring governments to act.
National interest above all
The rifts caused by Ukraine’s cheap food imports have created awkward tensions between Kiev and its Eastern European neighbors, especially at a time when Ukraine relies heavily on goodwill for political and military support. and the economy as the war with Russia continued.
In particular, any deterioration in relations with Poland is undesirable for Kiev as Warsaw has stood out as one of the strongest supporters of Ukraine at the EU level, committed to providing battle tanks and MiG fighters when the mainland neighbors were still hesitant with the idea. at the beginning of the year.
Polish farmers opposed to the import of Ukrainian agricultural products, instead of being transported through Poland to destination countries, tend to stay in the country and flood the local market.
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However, Poland is wary of voter sentiment and peasant protests over the issue as the country will hold parliamentary elections later this year, as will Slovakia.
Slovakia’s Ministry of Agriculture and Rural Development told CNBC that despite the temporary import ban on Ukraine, the country remains open for “solidarity transit,” meaning Ukrainian grain can still be pass through its territory to other countries. In a statement, it said the grain would be sealed “so as not to be consumed on the Slovak market”.
“The problem needs to be solved… to stabilize the market and the prices of agricultural products,” the ministry said, adding that the European Commission was aware of its challenges. The ministry added that “we would appreciate a pan-European solution [to] grain Ukraine because the subject concerns the protection of the entire internal European market.”
Meanwhile, the Hungarian Ministry of Agriculture summarized the comments made by Minister István Nagy to CNBC, who said that “if current market trends prevail, they will cause serious damage to the Hungarian agricultural sector. to the extent that extraordinary measures have to be taken to prevent them.”
It said Ukraine’s agricultural sector operates with production methods that are no longer allowed in the European Union and, as a result, have “extremely low production costs”, adding that Ukraine has started exporting Exporting large quantities of poultry, eggs and honey to Europe. markets, other than cereals and oilseeds, make it impossible for Hungarian and Central European farmers to sell their produce.
“The Hungarian government will always stand with Hungarian farmers and protect Hungarian agriculture,” emphasized Mr. Nagy, the ministry noted.
EU, Ukraine confused
The suspension caused shock in Ukraine, which issued a statement saying it regretted Poland’s decision to suspend imports of grain and that Ukraine “has always sympathized with the situation in the sector.” agricultural sector of Poland and respond promptly to various challenges.”
The dispute has made some positive progress after the Polish and Ukrainian ministers met for two days of talks to discuss how to resolve the tension, with officials agreeing on Tuesday that there would be no dispute. Any agricultural products of Ukraine stay in Poland and they will only be allowed to transit through the country under escort.
How Contract will work in practice remains to be seen. CNBC has reached out to both the Ukrainian and Polish agriculture ministries and is awaiting further comment on the deal.
Truck drivers line up for more than 10 kilometers at the Rava-Ruska border checkpoint on the Ukraine-Poland border, on April 18, 2023.
Yuriy Dyachyshyn | AFP | beautiful pictures
The European Commission was puzzled by the sudden import ban of several member states (which already have strained relations with Hungary and Poland), saying unilateral actions on trade were unacceptable. received under EU policy.
It said on Monday that it was in contact with the EU member states that introduced the bans and was reviewing the legal basis that the suspension orders were issued.
However, they added that they recognize that Eastern European countries have supported Ukraine in many areas and that the problem is not “sanctions, but a solution based on EU law for the benefit of Ukrainians”. and the EU.”
It also said it recognized the impact of the “oversupply” of Ukrainian imports on EU farmers, especially those in bordering countries.
The Commission has introduced a package of measures worth 56 million euros ($61.3 million). compensation to affected farmers in Poland, Bulgaria and Romania for what it describes as “economic losses due to increased imports of grains and oilseeds and [to] limit the impact of market imbalances on their farming decisions.” It is also planning a second package of support, it said Monday, with details yet to be finalized. benevolent.
Ships, including those carrying grain from Ukraine and awaiting inspection, are seen moored off the coast of Istanbul on November 2, 2022 in Istanbul, Turkey.
Chris McGrath | beautiful pictures
There are certainly concerns that import bans in Eastern Europe could prompt Russia to abandon the “Black Sea Grains Initiative” brokered by the United Nations and Turkey last year and allow the cup Ukraine leaves the country through several seaports.
Although the agreement has been extended several times, it has come under serious strain with Russia repeatedly being accused of preventing grain ships from leaving Ukraine; On Monday, EU foreign policy chief Josep Borrell accused Russia of blocking 50 ships carrying agricultural products from Ukrainian ports.
Moscow has also says there is no guarantee that it will agree to an extension of the agreement beyond May 18, when it expires.
