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Eastern European countries push for bans on Ukrainian grain to be extended until end of year

Ukraine is one of the world's top producers of wheat and maize, on which dozens on low-income nations depend.
Ukraine is one of the world's top producers of wheat and maize, on which dozens on low-income nations depend. Copyright Efrem Lukatsky/Copyright 2022 The AP. All rights reserved
Copyright Efrem Lukatsky/Copyright 2022 The AP. All rights reserved
By Jorge Liboreiro
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The on-and-off controversy over tariff-free imports of Ukraine grain coming into the European Union is back on the agenda.

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Poland, Hungary, Slovakia, Romania and Bulgaria have put forward a joint demand to extend the temporary bans on Ukrainian grain until the end of the year, even if Brussels had insisted the measures would be phased out for good by 15 September.

Under the bans, wheat, maize, rapeseed and sunflower seed coming from Ukraine can transit through the five Eastern European countries but not stay inside their markets for domestic consumption or storage purposes.

The Eastern coalition says this list of targeted products should "remain open" and possibly cover goods "other than cereals and oilseeds," something that the European Commission had previously ruled out.

"In the event that the preventive measure is not extended, this will have a profound impact in the frontline member states on the prices and the storage capacity, which is essential for the grain to be harvested," the countries wrote in a common document.

The idea was discussed on Tuesday during a meeting of EU agriculture and fisheries ministers in Brussels, where diverging views came forth.

"Imports from Ukraine have caused a drop in grain and oilseed prices, thus bringing large losses to Romanian farmers who find themselves in the very difficult situation of selling their products at prices lower than production costs," said Florin-Ionuț Barbu, Romania's minister for agriculture and rural development.

"Unfortunately, the support granted continues to be low when compared to the losses incurred by producers and only partially solves the difficult situation."

His French counterpart, Marc Fesneau, warned against "going it alone" and underlined the need to act collectively to find "intelligent solutions" based on economic data. France is among the countries that have expressed displeasure over the only-transit prohibitions and their impact on the single market.

"We're revisiting the issue every three months. Personally, I would like the Commission to adopt a strategy that is more medium-term," Fesneau said ahead of the meeting in Brussels. "We can't just go along with crises as they arise."

Meanwhile, Lithuania unveiled its own proposal: a plan to reinforce the Baltic route by simplifying administrative procedures at the Polish-Ukrainian border and clearing customs directly at the Klaipėda port to save time and increase cargo capacity.

"The Baltic infrastructure may become a viable and reliable transit route for Ukrainian products. The Baltic seaports have a large handling capacity of agricultural products totalling 25 million tons per year for grain alone," the Lithuanian government said in a letter addressed to the European Commission.

At the end of Tuesday's meeting, Janusz Wojciechowski, the European Commissioner for agriculture, expressed support for the Lithuanian pitch and said it would require extra funding to make it work. On the issue of Ukrainian grain, Wojciechowski said the executive would come up with a market analysis before mid-September, with a possibility to examine poultry and fruits, two products that Poland is worried about.

"There are different positions but there's a good understanding of how serious is the situation," Wojciechowski said.

Grain under attack

The fresh debate has been prompted by Russian President Vladimir Putin's decision last week to pull out of the Black Sea corridor and launch a brutal campaign of strikes against Ukraine's grain terminals and seaports.

For the past year, the Black Sea deal, an initiative backed by the United Nations and Turkey, allowed the transport of 33 million tonnes of grain and foodstuffs from Ukraine to countries around the world, including low-income nations such as Bangladesh, Egypt, Tunisia, Libya, Ethiopia, Yemen, Afghanistan and Sudan.

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The abrupt collapse of this commercial route, whose functioning had become increasingly precarious amid speculation that Moscow would withdraw, has thrust global supply chains back into disarray and pushed commodity prices further up.

"We're very worried about this decision but we're not surprised. This is not the first time Russia uses food as a weapon," Wojciechowski said.

The Russian strikes have also renewed attention over the EU's so-called "solidarity lanes," the land and river passages the bloc has facilitated to help Kyiv move its grain supplies during wartime. The initiative was boosted by a special trade regime that exempted a wide range of Ukrainian exports from tariffs and duties.

The "solidarity lanes" have so far enabled the transport of 41 million tonnes of foodstuffs and 36 million tonnes of non-agricultural products, according to data published by the European Commission.

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But the influx of low-cost Ukrainian cereals has been met with a furious response in Poland, Hungary, Slovakia, Romania and Bulgaria, who complained the glut is filling up storage, depressing prices for local farmers and distorting their internal markets.

Faced with threats of uncoordinated national restrictions, the European Commission rushed to negotiate a deal that imposed "exceptional and temporary preventive measures" on four Ukrainian crops: wheat, maize, rapeseed and sunflower seed, the ones considered to have the strongest disruptive effect.

Since May, these products are allowed only transit through the five Eastern countries, meaning they cannot be stored in their territory nor purchased for domestic consumption. Instead, they are sent directly to other member states, like Spain, Italy and the Netherlands, or shipped to developing nations around the world.

In early June, the European Commission took the decision to prolong the bans until 15 September, warning the phase-out would be definitive. But the latest developments in the Black Sea cast serious doubt over the bloc's capacity to abide by the deadline.

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"Today we have this temporary ban which is necessary because, otherwise, the farmers in the frontline countries would have not survived this," Wojciechowski said. "Let's hope we find a solution and the Black Sea corridor is freed again."

In Kyiv, President Volodymyr Zelenskyy decried the calls for a new postponement and said his government expected 15 September to be the very final day.

"Any extension of the restrictions is absolutely unacceptable and outright non-European," Zelenskyy said in his nightly address. "Europe has the institutional capacity to act more rationally than to close a border for a particular product."

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