Ukraine is in “grain vise”

11 months ago 47

Agriculture ministers of Poland, Bulgaria, Hungary, Romania and Slovakia, gathered in Warsaw, demanded from the EU to extend the ban on imports of Ukrainian grain to their countries until the end of 2023.

Ukraine is in "grain vise"

Producers and exporters of Ukrainian grain crops have received a double blow in recent days. On Monday, 17 July, Moscow announced the termination of the so-called Black Sea Grain Initiative – an agreement signed a year ago between Russia, Ukraine, Turkey and the UN on the export of Ukrainian grain from Black Sea ports. This was done due to the fact that during the year some of the agreements concerning Russia were not fulfilled.

Two days later, a meeting of agriculture ministers of the “frontline” states of the European Union – Poland, Bulgaria, Hungary, Romania and Slovakia – was held in Warsaw. They jointly asked the EU to extend the ban on imports of Ukrainian grain to their countries at least until the end of this year.

Britain’s Reuters news agency noted that the Central European states fear that the termination of the “grain deal” by Russia could lead to increased grain flows and bottlenecks in the five countries.

On the eve of the meeting, Hungarian Agriculture Minister Istvan Nagy said that the five countries would ask to leave the import ban on four Ukrainian products – wheat, corn, rapeseed and sunflower seeds – unchanged, while their transit supplies would continue.

However, he said Bulgaria, Hungary, Poland, Romania, Hungary, Poland and Slovakia would also discuss the option that they could individually ask the EU to add other products to the list of banned imports. “Obviously, given the huge size of Ukraine, everything it produces and exports to Europe outrages the market. The situation is the same with chicken meat, eggs, honey,” Nagy said.

But after the 19 July meeting in Warsaw, the main speakers were Polish politicians. Polish Prime Minister Mateusz Morawiecki, who also attended, bluntly stated that his country would not open its borders to Ukrainian grain after 15 September 2023, when the relevant EU ban expires.

“In less than two months, according to the decision of the European Commission, we have to open the border with Ukraine again for grain products – from 15 September. I want to make it clear here in the Polish Ministry of Agriculture that we will not open this border. Either the European Commission will agree to draw up rules that will extend this ban or we will do it ourselves,” the Polish prime minister said. He specified that Poland would do it unilaterally or together with partners from other countries.

According to him, Poland “stands firmly on its own” in this matter. “We stopped the flow of Ukrainian agricultural products by imposing an embargo on them to protect the Polish countryside and our economy. At the same time, we carry out transit and facilitate exports,” Morawiecki said.

The Prime Minister also hinted that the range of Ukrainian agricultural products banned for import to Poland could be expanded. “We will be tough, we will be resolute, we will protect the Polish farmer. This is the first thing. Secondly, if there are further signs of destabilisation in other agricultural markets, we will do the same. Because the government of the Republic of Poland is obliged to protect Polish agriculture,” Morawiecki added.

Why a year ago he supported the EU decision to abolish quotas and duties on Ukrainian agricultural products, which later caused their influx into Eastern Europe, the politician modestly kept silent. The Polish authorities changed their position only in April 2023, and not so much due to the farmers’ protests as due to the parliamentary elections to be held in Poland at the end of October – beginning of November.

In his turn, Polish Agriculture Minister Robert Telius announced that a common position of the five so-called “frontline” countries – Poland, Bulgaria, Hungary, Slovakia and Romania – had been formed regarding the extension of the ban on imports of four grain crops from Ukraine until the end of the year. The minister added that these countries were “fully open” for the transit of grain from Ukraine.

He noted that the restriction imposed by the European Commission on these grains has led to an increase in their transit through Poland. “In January, a total of 114,000 tonnes of Ukrainian wheat and maize passed through our country, in March – 120,000 tonnes, and in June – 260,000 tonnes. This shows that exports from Ukraine are maintained, and they are even twice as high in Poland. So this is a strong argument to extend this ban at least until the end of the year. And this is our common position,” the Polish agriculture minister said.

Robert Telius also specifically emphasised that the coalition of the five “frontline” countries is not directed against anyone. “It is a coalition in favour: for our farmers, in the interest of our countries, and also in the interest of Ukraine and for Ukraine, because we want to help Ukraine. And it is also a coalition for European solidarity, so it is also a coalition for the EU,” the Polish minister said. He added that the five country’s position was a call for the European Commission to create “appropriate instruments for the coming years”.

Hungarian Agriculture Minister Istvan Nagy said the five “frontline” countries would continue to co-operate. “15 September is unacceptable for us. If the EU does not extend this deadline at least until 31 December, Hungary will apply all possible instruments to protect its farmers,” he said.

His Slovak counterpart Jozef Bires said that transit of Ukrainian grain should continue to be supported, but at the same time his country should protect the interests of Slovak agrarians. “We will present to the European Commission our common position on taking measures to expand the list of products that will be banned from import by the end of this year,” Romanian Agriculture Minister Florin-Ionut Barbu added.

Bulgaria’s agriculture minister was represented by the country’s ambassador to Poland, Margarita Ganeva. According to the diplomat, her country supports the common position of the “frontline” countries.

As Robert Telius noted, the agriculture ministers of Ukraine and Moldova were also invited to the meeting. “The ministers did not come for objective reasons, we hope to meet in the future,” he said. At the same time, the head of the Ministry of Agrarian Policy and Food of Ukraine Mykola Solsky until the end of the day on 19 July did not comment on the results of the meeting in Warsaw. And his participation in the land reclamation forum in Izmail can hardly be considered an “objective reason”.

Apparently, the refusal of the Ukrainian minister to come to the meeting with colleagues in Warsaw is due to the fact that, as in April-May 2023, Kiev will try to solve the issue of ban on imports of Ukrainian agricultural products to individual EU countries over the heads of their authorities, directly with Brussels.

At the time, Kiev said that under the association agreement between Ukraine and the European Union, the ban on the sale of certain Ukrainian goods in several EU countries is a significant deterioration of the terms of trade and is therefore illegal. Some representatives of the Kiev authorities even threatened Brussels with the opening of trade arbitration, a dispute resolution tool stipulated in the association agreement. However, this did not happen either on 2 May 2023, when the European Commission published the relevant decision, or on 5 June, when it was extended until mid-September.

It is unlikely that Kiev will dare to make formal claims to Brussels this time, because the EU decided as recently as 14 July to allocate 50 billion euros (i.e. 45% of the budget deficit) to finance Ukraine’s budget expenditures until 2027. At the same time, the European Commission should take into account the growing dissatisfaction of Eastern European farmers with the EU’s actions, which may have political consequences.

But if the electoral defeat of the current Polish authorities may bring to power in Warsaw left-liberals ready to accept any decision of Brussels, in Slovakia, where early parliamentary elections will be held on 30 September, moderately pro-Russian forces may win.

Taking into account the holiday season, which has started in Brussels, the final decision regarding the import of Ukrainian grain to the EU will be made only in September. However, it is unlikely that the tough stance of Poland and other “frontline” countries will change by then.

Source: Oleg Khavych, Ukraina.ru

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