EU seeks settlement over divisive Ukrainian grain exports

10 May 20232 min reading

In a bid to protect their own agricultural sectors, five EU countries (Bulgaria, Hungary, Poland, Slovakia, Romania) have announced bans on grain imports from Ukraine. However, the EU has criticised the unilateral measures and is engaged in diplomatic efforts to find a common solution.

Following Russia's invasion of Ukraine in February, the Black Sea route used by Ukraine to export grain was blocked. With 20 billion tonnes of grain trapped in Ukraine and global food prices soaring, the European Union set up "solidarity lanes" last May to allow exports to flow through member states. The EU also suspended tariffs on Ukrainian products. But farmers in Poland then began protesting that they were being flooded by Ukrainian grain imports and felt they were being undercut, even if the grain was supposed to be destined for sale outside the EU.

In April, Ukraine's western neighbours Bulgaria, Hungary, Poland, Romania and Slovakia announced import restrictions on Ukrainian grain. The European Commission has criticised the moves and now working on a new round of funding to help farmers and a common approach. In the last week of April, Warsaw and Bucharest indicated that they would lift some of the restrictive measures.

If the import bans, which also stop transit, remain in place, they could potentially push up global food prices again. Ukraine accounts for 10% of the global wheat market, 15% of the maize market and 13% of the barley market, according to the European Commission. Food prices spiked to record highs last year, causing major concerns on international food security. But they have now recovered to pre-war levels, according to figures from the UN Food and Agriculture Organisation's index.

The European Commission warned that trade decisions are taken collectively within the EU. Spokeswoman Miriam Garcia Ferrer said unilateral decisions on trade by individual countries were not possible.

The European Commission is considering assembling another aid package of some €100m ($110m). This follows a €56 million package earlier this year, plus national aid plans funded in part by the relaxation of EU state aid rules.

Discussions are now focusing on finding a common EU approach to ensuring that Ukrainian grain leaves the country and reaches non-EU markets. One option could be to impose a temporary ban on importing grain into Ukraine's EU neighbours that isn't destined to sell outside the EU.  

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