Poland, Hungary and Slovakia has moved to temporarily prohibit the import of tariff-free Ukrainian grain.
ADVERTISEMENTThe rift over tariff-free imports of Ukrainian grain has acquired a new dimension after the European Commission decried as unacceptable the bans imposed by Poland and Hungary over the weekend.
Slovakia, another country that neighbours Ukraine, adopted a similar prohibition on Monday, while Bulgaria suggested it might soon follow suit.
The bans are temporary and target various types of grain and agricultural products.
These four member states have repeatedly complained about the influx of low-cost Ukrainian cereals, arguing the massive arrival of produce is filling up warehouses, distorting the market and depressing prices for local producers.
"We are aware of Poland and Hungary’s announcements regarding the ban on imports of grain and other agricultural products from Ukraine. We are requesting further information from the relevant authorities to be able to assess the measures," said a spokesperson of the European Commission.
"In this context, it is important to underline that trade policy is of EU exclusive competence and, therefore, unilateral actions are not acceptable. In such challenging times, it is crucial to coordinate and align all decisions within the EU."
Ukraine is a global leader in the export of maize, wheat, sunflower, barley and other foodstuffs, which provide a lifeline to many developing countries across the world.
But these flows have been severely imperilled by Russia's invasion, forcing the United Nations and Turkey to act as mediators and broker the so-called Black Sea Grain Initiative.
The initiative provides the guarantee that Russia will not attack ships that carry exports of commercial food and fertilisers from three Ukrainian ports: Odesa, Chornomorsk and Yuzhny/Pivdennyi.
Although fragile, the deal has been renewed several times and has so far resulted in exports of over 23 million tonnes of grain and other foodstuffs, according to EU estimates.
Almost half of the cargo was maize, which needed to be moved out of Ukraine in order to make space for the summer harvest.
In parallel, the EU decided to suspend duties and quotas on a long list of Ukrainian exports destined for the bloc, including many agricultural goods, in a bid to help the war-torn country cope with the economic fallout from Russia's war and facilitate trade for Ukrainian farmers.
The suspension is meant to last until June this year but the Commission has proposed a one-year extension until June 2024.
Both programmes – the Black Sea deal and the EU's solidarity lanes – have worked to lower international commodity prices: World Bank figures show maize at $394.8 per metric tonne in February, compared to its May 2022 peak of $522.29.
This trend, however, has been met with fierce criticism in Poland, Hungary, Slovakia, Romania and Bulgaria. They complain that "unprecedented levels" of tariff-free grain are being stockpiled inside their countries and putting local producers at a disadvantage.
"If market distortions causing damage to farmers in our countries cannot be eliminated by other means, we ask the Commission to put in place appropriate procedures to reintroduce tariffs and quotas on imports from Ukraine," the leaders of the five member states said in a joint letter addressed to European Commission President Ursula von der Leyen.
The Polish government, one of Ukraine's staunchest supporters, has led calls against the surplus of cheap grain, urging Brussels to take action, step up assistance through EU funds and ensure Ukrainian imports are evenly distributed across the entire bloc.
In the face of growing anger from farmers, who fear financial and job losses, Polish Agriculture Minister Henryk Kowalczyk resigned from his post earlier this month, a decision that coincided with a state visit from Ukrainian President Volodymyr Zelenskyy.
ADVERTISEMENTSpeaking of a "moment of crisis," the leader of Poland's governing party, Jarosław Kaczyński, announced on Saturday a decision to temporarily prohibit the import of grain and other foodstuffs, such as sugar, eggs, honey, milk, various types of meat and wine, that come from Ukraine.
The ban appears to be total as it also applies to the transit of goods through Poland.
Kaczyński added the government was prepared to discuss the issue with the Kyiv authorities, who deplored the move as "drastic" and contrary to previous arrangements.
Hungary followed suit and joined the ban later on Saturday without specifying the blacklisted products.
Warsaw and Budapest said their bans would remain in force until 30 June, when the EU's suspension of tariffs is due to expire.
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Besides its initial condemnation, the European Commission said on Monday it lacked "full clarity" on the legal basis behind the Polish and Hungarian decisions and it was "too early" to comment on possible steps to make both countries comply with EU law.
The Commission underlined the benefits of the solidarity lanes and acknowledged the impact of "oversupply" on the European market.
In its legislative proposal to extend the tariff-free programme for Ukrainian imports, the executive added an "expedited safeguard" to allow for the reintroduction of duties on products that "adversely affect" the European market, although it is still unclear if this would be triggered under the present conditons.
"It's not our objective, nor anybody's objective, to wreck difficulties on populations within the European Union whilst we are supporting Ukraine," said a Commission spokesperson.
The executive unveiled in March an assistance package worth €56.3 million to compensate affected farmers in Poland, Bulgaria and Romania for the economic loss caused by the rise in agricultural imports and the pressure on supply chains.
ADVERTISEMENTA second aid package of EU funds is under works, the Commission confirmed, without providing any specific details.
Asked about why Ukrainian goods were not being shipped out to Africa and the Middle East, the spokesperson said the solidarity lanes were only an emergency plan to get grain out of the country, not a commercial deal to determine its "final customers."
"This is left to the economic operators because it is clear they're the best placed in order to ensure that (...) things can be sent to where they are needed," the spokesperson said.
"So it's not for us to basically be judging what that final destination should be."
This article has been updated to include new reactions and developments.
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