2023-04-17 21:00:01
WWhilst Ukraine is fighting a defensive battle in the east, it is threatened with a new conflict in the west. More and more countries in Eastern Europe are blocking the import of Ukrainian agricultural products because their farmers are suffering from the price pressure of the imported goods. At the same time, Russia is considering terminating the agreement on grain transport from Black Sea ports, which expires in mid-May. The EU Commission is also coming under pressure to act as a result of the push by its eastern members: Since it wants to stabilize Ukraine, it can hardly accept a slump in important agricultural exports. The Commission referred to its exclusive competence in trade matters. Unilateral measures are “unacceptable”.
“What exacerbates the decision by Poland and Hungary is that they also ban products intended for transit,” says Olga Pindyuk, Ukraine specialist at the Vienna Institute for International Economic Studies (WIIW), the FAZ cheap grain from the Ukraine are dependent are affected.
The blockade is also putting the logistics chain under stress again: “The import restrictions for agricultural products recently introduced in the neighboring countries of Ukraine are affecting traffic in general,” explained the Austrian Federal Railways (ÖBB) when asked by the FAZ. The ÖBB has been one of the largest grain transporters since the beginning of the war. Initial experience now shows that differentiating between import and transit transports is so complex that “this slowing down of the processes means that not only the agricultural products but all transports get stuck in the network and important supply routes are prevented from penetrating”. What is needed is a solution “that does not pose additional challenges to the supply of European customers in the already tense situation”.
“Accidental Price Dumping”
Nevertheless, the import ban announced by Poland and Hungary is having an impact, in Poland alone it is about 500,000 to 700,000 tons per month. The interim government is also considering this in Bulgaria. At the beginning of April, the Minister of Agriculture showed solidarity with demonstrating farmers who were demanding an import ban. In Slovakia, the government, which is about to have elections like in Poland, has announced a marketing ban for Ukrainian grain, citing the discovery of a pesticide that is not approved in the EU.
Although Romania’s government is also upset about the “unintentional price dumping”, it is in a different situation. Since the Russian attack, the country has been exporting Ukrainian grain via the seaport of Constanta; in the first quarter of 2023 it was 3.3 million tons. That is why Bucharest is trying to clarify bilaterally what others are trying to do with a blockade.
The tougher pace of the Eastern Europeans comes as no surprise: at the end of January, the governments of Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia complained to the EU Commission about the growing problems caused by Ukrainian agricultural exports. Because many of the deliveries, which were only intended as transit, remained in the countries and depressed prices and yields for domestic producers. They’re angry about it.
#Unexpected #consequences #import #freeze #Ukraine #grain