Poland, Slovakia, Bulgaria and Hungary have passed restrictions on Ukrainian food, all because of stocks in their countries that could keep prices low in local markets to the detriment of farmers. After the outbreak of hostilities, the European Union helped Kiev to export products to Eastern European countries, but they did not have enough opportunities to export more goods outside Europe. Poland and other neighbors of Ukraine started complaining about the situation at the beginning of April and have now taken unilateral measures to solve the problem, especially since the elections are approaching and the politicians do not want to offend the farmers. Who can benefit from this situation and how Europe will solve it – in Russian media material.
What restrictions have been introduced in Eastern Europe
Four EU countries – Poland, Slovakia, Bulgaria and Hungary – have temporarily imposed import restrictions on various types of agricultural products from Ukraine. Restrictions in Bulgaria will enter in force since April 24.
Another EU member – Romania – has also considered introduction of restrictions on Ukrainian imports.
Minister of Agriculture of Hungary Istvan Nagy said that the ban applies to cereals, rapeseed and sunflower seeds, flour, vegetable oil, honey and certain meat products. At the same time, the transit of Ukrainian products through Hungary continue .
Poland initially banned the transit of Ukrainian food, but after negotiations with representatives of Ukraine deleted it is a limitation.
Eastern European countries stressed that the ban is temporary and explained this out of concern for their own farmers, who suffer losses due to the dumping prices of Ukrainian products.
“We will never leave farmers without help. Therefore, we have specific measures (including) a ban on the import of grain from Ukraine to Poland,” writing Polish Prime Minister Mateusz Morawiecki on Twitter.
“If current trends continue, damage will be done to Hungarian agriculture,” said in a statement by Hungarian Agriculture Minister István Nagy. He noted that cheaper agricultural products from Ukraine were undermining the position of Hungarian producers of poultry meat, eggs, honey, grains and oilseeds.
Why is there so much Ukrainian food hoarded in EU countries?
In peacetime, about 75% of Ukraine’s foreign trade took place through ports. The share of grain that went to overseas markets by sea was 98 percent, and vegetable oils 90 percent, the analytical publication GMK Center noted.
After the outbreak of hostilities, the situation of Ukrainian food exports became complicated and, as a result, the country’s exports in January-April 2022 fell by 58% year-on-year.
Two initiatives have been adopted to help Ukraine — and countries importing its products. The first is a “grain deal” involving Kiev, the UN and Russia, which allows Ukrainian ships to transport food along the humanitarian corridor without fear of attack.
The second initiative is the “solidarity lines”, representing is a transport channel for exports and imports between Ukraine and the European Union with the support of the European Commission. The initiative allows Ukraine to export products under simplified procedures via land and river routes to Europe.
Most Ukrainian cereals and other foodstuffs in the summer until December 2022 were exported through the “solidarity lines”. In December 2022 in the EU noted that Ukraine delivered 15 million tons of agricultural products along these routes, and 10 million tons along the humanitarian corridor formed as a result of the “grain agreement”.
The European Union has succeeded in re-exporting some Ukrainian grain to other countries. By data European Commission, barley exports from the EU in the 2022-3 season (until March 26) amounted to 771,000 tonnes compared to 55,000 tonnes in the previous season, soybeans – 950,000 tonnes (336,000 tons last season), sunflower seeds – 2 million tons. (21 thousand tons), rapeseed – 3 million tons. (2 million tons), mealy wheat – 4 million tons. (346 thousand tons), corn – 11 million tons. (7 million tons.).
However, by the spring, so many Ukrainian agricultural products had accumulated in the countries of Eastern Europe that the existing infrastructure simply did not allow them to be transported to other countries, writing Bloomberg. The volume of corn and wheat inspections at Ukraine’s borders with Poland, Slovakia, Hungary and Romania has increased several times, underline GrainStats project. Lines of trucks carrying Ukrainian agricultural products piled up at the borders, and in early April politicians began asking the European Commission to introduce protective measures for their farmers.
“Local producers have been slow to sell their products in anticipation of rising prices since the outbreak of hostilities (in Ukraine), but slowing global economic growth has led to lower prices, as a result of which farmers Poland, Romania, Slovakia, Hungary and Bulgaria may not receive the expected income. It will also be difficult for them (farmers) to empty their stocks before the next harvest in summer. states Bloomberg.
The approach of parliamentary elections in Slovakia and Poland complicates the situation – the vote in both countries is scheduled for autumn, so politicians do not want to lose favor with farmers.
What to expect next
Eastern European countries that have imposed restrictions on the import of Ukrainian products have said that this is a temporary solution and that they are ready to dialogue with Ukraine and the European Commission . For example, although initially Poland introduced a complete ban on the import of agricultural products, after negotiations with representatives from Kiev in Warsaw, it agreed to transit products from Ukraine.
EU authorities are likely to offer Eastern European countries assistance in the transport of Ukrainian grain surpluses and, in the future, may reinstate customs duties on the import of agricultural products from Ukraine, writing Politico in reference to the statement of the European Commission.
In a letter to five Eastern European countries, the European Commission proposed “preventive measures” against imports of Ukrainian corn, wheat, sunflower and rapeseed. A spokesperson for the European Commission told POLITICO that this would result in the imposition of tariffs on Ukrainian goods, saying the process would first require the launch of an investigation into the impact of Ukrainian imports on the EU common market.
The EU will also allocate 100 million euros to help agricultural producers in countries neighboring Ukraine, transmits Reuters.
Formally, trade policy falls within the competence of the supranational authorities of the European Union, ie the European Commission. Individual EU Member States can’t impose duties or unilaterally change the terms of trade with other countries.
Eastern European restrictions on Ukrainian food supplies could work in Russia’s favor as Kiev will have to rely more on moving grain along Black Sea routes under the grain deal , admits Androy Sizov, director of the think tank SovEcon. “Grain shipments from Odessa terminals are becoming more and more important for Ukraine, which means that Moscow is getting more leverage,” writing expert in his Telegram channel. As for the impact of the decision of the countries of Eastern Europe on the world grain markets, it seems at this stage very limited, believes Sizov. The story is unlikely to lead to higher prices and instead serve as a reminder of how high EU grain and wheat supplies are, the analyst said.
The so-called “grain agreement” is the only international agreement reached between Moscow and Kiev during the period of hostilities in Ukraine, but its fate remains uncertain. In March, Russia announced the extension of the agreement by 60 days instead of the planned 120. Moscow has also authorized the suspension of the agreements if its interests in the unimpeded export of its own products to world markets Won’t do correctly accounted for. Ukraine, Turkey and China, where a significant share of Ukrainian grain is shipped, favor extending the agreements.
Read the Latest Ukraine War News on The Eastern Herald.
