In May 2022, the EU dropped duties in the wake of the Russian invasion to help Kyiv maintain vital revenues
Vienna, Austria — A decision by the European Commission to end an import ban on Ukrainian grain in five member states has led to tensions, unilateral embargoes and discontent among farmers.
Ukraine’s pledge to put in place measures to control the export of wheat, maize, rapeseed and sunflower seed to avoid upsetting markets has failed to pacify several of its EU neighbors.
Here is the state of play:
Transit routes and bans
Russia’s invasion of Ukraine closed Black Sea shipping lanes used before the war, resulting in the European Union becoming a major transit route and export destination for Ukrainian grain bound for Africa and the Middle East.
In May 2022, the EU dropped duties in the wake of the Russian invasion to help Kyiv maintain vital revenues.
Faced with a slump in prices on local markets and angry European farmers, Brussels in spring agreed to allow five countries to restrict imports of grain from Ukraine through September.
The measures allowed the products to keep transiting through Bulgaria, Hungary, Poland, Romania and Slovakia, but stopped them from being sold on the local market.
But the agreement expired on Friday and the European Commission refrained from renewing it, citing the disappearance of “market distortions” and improved transport conditions.
Hungary immediately announced it was going to close its border to 24 Ukrainian products, up from four previously.
Poland’s populist right-wing government followed suit and extended an embargo on Ukrainian grain, as the issue is particularly sensitive ahead of next month’s elections.
Slovakia announced it would be banning the import of four commodities, including wheat, until the end of the year.
Romania has said it is prepared to impose a ban for a month, if it is unable to obtain necessary guarantees from Kyiv.
In response, Kyiv on Monday said it had filed lawsuits at the World Trade Organization (WTO) against its three EU neighbors over their bans.
The EU Agricultural Commissioner Janusz Wojciechowski said he was “quite surprised that Ukraine chose this route” given that export volumes have risen sharply in recent months despite the restrictions.
“I’m still hopeful that we will manage to resolve these issues through amicable dialogue,” he said, adding that “any breakdown of unity within the EU” wouldn’t benefit Ukraine.
Bulgaria: the exception
Contrary to its neighbors, Bulgaria decided to end the import ban, citing “solidarity with Ukraine” and the need to “guarantee food security on a global scale”.
The Balkan country stands out because it has many sunflower oil producers who have complained of a serious shortage of seeds and high prices since the embargo was put in place.
While the sunflower producers hailed the move as a “triumph of reason”, Bulgaria’s cereal producers vented their anger by blocking bridges and crossroads with their tractors on Monday.
Sunflower seeds and their oil are core exports for Ukraine, which in 2020/2021 produced 31 percent of all global sunflower oil, according to the United States Department of Agriculture.
Romania: the main export hub
After Moscow withdrew from a grain deal in July that allowed Kyiv to export around 33 million tons of grain across the Black Sea, “solidarity corridors” set up by the EU have played a major role.
“All cereals now pass through the solidarity lanes, which are working better and better thanks to EU money,” Olia Tayeb Cherif, head of research at the Farm Foundation, a think-tank dedicated to agricultural issues, told AFP.
However, it is difficult to say exactly how much of it gets reshipped, the expert said.
Poland mainly transports cereals by road to the Baltic Sea.
But the largest quantities of Ukrainian grain exports pass through Romania.
Its Black Sea port of Constanta — the largest for cereals in Europe — receives grain from trucks, trains and barges after a journey along the Danube bordering Ukraine to load them onto ships.
In an effort to disrupt shipping lanes on the Danube river, Moscow has ramped up attacks on the Ukrainian river ports of Izmail and Reni.
To avert bottlenecks and relieve traffic pressure, Kyiv and Bucharest signed an agreement in August.
The Romanian government aims to have 60 percent of Ukraine’s total cereal exports transit through its territory in the long term.
Prime Minister Marcel Ciolacu on Monday announced the amount of Ukrainian grain passing through the country has been increased to 2.5 million tons per month, as it aims to expand it to four million tons.
Smaller players
In neighboring Bulgaria, the Black Sea ports of Varna and Burgas represent another possible route, despite the Balkan country’s dilapidated infrastructure.
Croatia has also offered to help as its Rijeka port in the north near Italy has been exporting about 100,000 tonnes of Ukrainian corn and wheat since May 2022.
While Russia continues to dominate the grain export market, heavyweight Ukraine is resisting, with production estimated to reach 20.5 million tons in the 2023-24 season.
The figure was 33 million tons in 2021-22 before the Russian invasion, according to Agritel data. AFP
