Farmers inspect unsold grain stores at a farm in Sedziejowo, Poland, Monday, April 17, 2023.
Bartek Sadowski | Mayor Bloomberg | fake images
Western nations have tried to help Ukraine maintain its vital exports of grains and agricultural products since the war with Russia began, but trouble has been brewing in Eastern Europe, where a glut of abundant and cheaper goods is seen of Ukraine is harming the interests of domestic providers. .
Following a wave of mounting anger from their own growers, Poland, Hungary and Slovakia have in recent days introduced temporary bans on imports of grain and other agricultural products from Ukraine, saying they have created unfair competition and trading conditions for local farmers. . The import suspensions will last until the end of June.
Bulgaria has also said it is considering a ban, while on Tuesday Romania’s ruling Social Democratic Party stated that plans to request that the country’s ruling coalition enact a temporary ban on agri-food imports from Ukraine in order to “protect Romanian farmers”.
The move to ban farm imports from Ukraine has angered the European Union as the bloc has tried to help Kiev maintain its 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 led to increases in world food prices and shortages of some basic products, severely affecting to the poorest countries.
The UN and Turkey brokered an agreement between Ukraine and Russia to allow grain exports to leave the country through the Black Sea and this helped ease the crisis. The EU also created the so-called “solidarity lanes” help Ukrainian exports to leave the country via land routes in Europe, as well as the suspension of import duties on Ukrainian exports.
But Eastern European countries now say logistical challenges and supply bottlenecks have meant cheaper Ukrainian farm products have flooded into their own countries and not been shipped, putting pressure on storage facilities and forcing to lower prices. Farmers have protested against the situation, putting pressure on national governments to act.
national interests first
The divisions caused by cheap food imports from Ukraine have created an uneasy tension between Kiev and its Eastern European neighbors, particularly at a time when Ukraine relies heavily on goodwill for political, military and economic support while the war with Russia continues.
Any deterioration in relations with Poland, in particular, is undesirable for Kiev, as Warsaw has emerged as one of Ukraine’s most vociferous supporters at the EU level, pledging battle tanks and MiG fighter jets when its continental neighbors they still resisted the idea. at the beginning of the year.
Polish farmers protesting against imports of Ukrainian agricultural products, which instead of being transported through Poland to destination countries have tended to stay in the country and flood the local market.
Nurfoto | Nurfoto | fake images
However, Poland is wary of voter sentiment and farmer protests on the issue, as it will hold parliamentary elections later this year, as will Slovakia.
Slovakia’s Ministry of Agriculture and Rural Development told CNBC that despite its temporary ban on Ukrainian imports, the country remained open to “solidarity transit,” meaning Ukrainian grain could still pass through its territory to other countries. The grain would be sealed “so that it does not end up on the Slovak market,” he said in a statement.
“It is necessary to solve the problem… to stabilize the market and the prices of agricultural products,” the ministry said, adding that it had informed the European Commission about its challenges. The ministry added that “we would appreciate a solution from all of Europe [to] Ukrainian grain because the issue is related to the protection of the entire European internal market”.
Meanwhile, the Hungarian Ministry of Agriculture summarized to CNBC comments made by its minister István Nagy, who said that “if current market trends prevail, they will cause such serious damage to the Hungarian agricultural sector that extraordinary measures must be taken to stop them.” “.
He said Ukraine’s agricultural sector operated with production methods that were no longer allowed in the European Union and had “extremely low production costs” as a result, adding that Ukraine had started to export large quantities of poultry, eggs and honey to the European Union. market, in addition to cereals and oilseeds, which has made it impossible for Hungarian and Central European farmers to sell their products.
“The Hungarian government will always support Hungarian farmers and protect Hungarian agriculture,” Nagy stressed, the ministry noted.
EU, Ukraine stumped
The suspensions have caused consternation in Ukraine, which issued a statement saying it regretted Poland’s decision to suspend grain imports and that Ukraine “has always been sympathetic to the situation in the Polish agricultural sector and has responded promptly to various challenges.”
There have been some positive developments in the dispute after the Polish and Ukrainian ministers met for two days of talks to discuss a way to resolve the tensions, with officials agreeing on Tuesday that no Ukrainian agricultural products will remain in Poland and only will allow them to transit through the country under escort.
As the deal Will it work in practice remains to be seen. CNBC has contacted the Ukrainian and Polish Ministry of Agriculture and is awaiting further comment on the deal.
Truckers queue for more than ten kilometers at the Rava-Ruska border checkpoint on the Ukraine-Poland border, on April 18, 2023.
Yuriy Dyachyshyn AFP | fake images
The European Commission was perplexed by the surprising import bans of several of its member states (it has already soured relations with Hungary and Poland), saying that unilateral actions on trade were unacceptable under EU policy.
He said on Monday that he was in contact with the EU member states that had introduced the bans and that he was looking into the legal basis on which the suspensions were enacted.
However, he added that he recognized that Eastern European nations have been supporting Ukraine in many areas and that it is not about “sanctioning, but about finding solutions based on EU law that are in the interest of Ukrainians and the EU”.
He also said he recognized the impact of “oversupply” of Ukrainian imports on EU farmers, particularly those from neighboring nations.
The commission has already presented a package of measures worth 56 million euros (61.3 million dollars) to compensate affected farmers in Poland, Bulgaria and Romania for what he described as “the economic loss due to the increase in imports of cereals and oilseeds and [to] limit the impact of market imbalances on their planting decisions.” It is also planning a second support package, it said on Monday, with details still to be finalized.
Ships, including those carrying grain from Ukraine awaiting inspections, are seen anchored off the coast of Istanbul on November 2, 2022 in Istanbul, Turkey.
Chris McGrath | fake images
Certainly, there are concerns that import bans from Eastern Europe could strengthen Russia’s case to abandon the “Black Sea Grain Initiative” that was negotiated by the UN and Turkey last year and allowed Ukrainian grain to leave. of the country through various seaports.
While the deal has been extended several times, it is already under heavy pressure, with Russia repeatedly accused of blocking grain ships from leaving Ukraine; On Monday, the EU’s foreign policy chief, Josep Borrell, accused Russia of blocking the departure of 50 ships loaded with agricultural products from Ukrainian ports.
Moscow has also said there are no guarantees that he will agree to extend the deal further May 18, when it expires.