Poland and Hungary ban Ukrainian grain imports amid EU criticism and Kiev moves to reopen trade

17 Apr 2023 --- Cheap Ukrainian foodstuffs have destabilized Eastern European markets, moving Polish and Hungarian authorities to implement a swift ban on grain imports and oil crop seeds from the country. The restrictions will remain in place until the end of June.

Furthermore, Bulgaria is also set to implement a similar ban, according to the country’s Agriculture Minister Yavor Gechev.

Though quick, the ban was not wholly unpredictable. In a joint letter, the authorities of Bulgaria, Hungary, Poland, Romania and Slovakia warned on March 31 of the difficulties managing the surplus of cereals. They called for the activation of additional sources of agricultural financing coming from the EU. The countries also called on the European Commission (EC) to reintroduce tariffs on Ukraine’s imports.

Earlier in March, Copa-Cogeca said that EU farmers in the region are being “abandoned,” and that the EU is not acting fast enough or coherently. As promised EU aid will only arrive in the area in September.

While Eastern Europe is flooded with grain and other cheap Ukrainian agricultural products, other countries are emptying their coffers to maintain food security – with Egypt and Sri Lanka having secured IMF loans and Pakistan closing on a deal with the international body.

Moreover, Bulgaria, Hungary, Poland, Romania and Slovakia called for the EU to move all surplus grain out of their states toward Africa and the Middle East for humanitarian purposes and to achieve “the original goal of the Solidary Belts.”

Reopening food routes
This weekend, the Ukrainian Agricultural Ministry worked toward reestablishing normal trade relations with Poland and Hungary. In a meeting between the country’s ministry and the Hungarian agriculture ministry, Hungary “assured that transit for Ukrainian agricultural products will continue,” Ukrainian authorities said. 

Logistical bottlenecks have left Eastern European countries flooded with cheap grain.Nonetheless, in a statement, the Ukrainian Ministry of Agrarian Policy and Food called the Polish decision a “contradiction to our agreements.”

“At present, solving various kinds of issues by unilateral drastic actions will not speed up the positive resolution of the situation. We emphasize that there should be no misunderstandings between our states and business entities,” note the Ukrainian authorities.

 Ukraine says that it has “always been sympathetic to situations in the Polish agricultural sector” and moved a week ago for Ukrainian wheat, corn, sunflower seeds and rapeseeds to pass through Poland only in transit until July. 

“The first step, in our opinion, should be the opening of transit because it is quite important and it is the thing that should be done unconditionally and after that, we will talk about other things,” highlights Mykola Solsky, Ukraine’s Agriculture Minister.

Solsky will start talks this week also with Romania and Slovakia.

EC: Unilateral actions “unacceptable”
The EC denounced Poland and Hungary’s bans but did not specify if it will take any measures against Poland and Hungary for taking EU exclusive trade policy competencies. 

“In such challenging times, it is crucial to coordinate and align all decisions within the EU,” says Miriam Garcia Ferrer, commission spokesperson for trade and agriculture.

“In this context, it is important to underline that trade policy is of EU exclusive competence and, therefore, unilateral actions are not acceptable,” she continues.

Earlier this month, former Poland’s agriculture ministry, Henry Kowalczyk, resigned after the EC didn’t provide sufficient monetary aid for Polish farmers. The WFP has suspended its activity in Sudan following the death of three of its employees.

Collapsed infrastructure leaves the world starving
Eastern European nations have warned for months about the need for EC financial support for faster development of transport infrastructure and strengthening connectivity – railway, road, port infrastructure, expansion of border transshipment terminals, improvement of the Black Sea and Danube port infrastructure and intermodal connections.

Moreover, they also called for EU countries to provide additional vehicles to streamline the flow of goods from Eastern Europe toward the EU and global ports. 

“We call on the EC to propose a common EU solution which, in cooperation with the World Food Program (WFP), would ensure the purchase of Ukrainian grain so that it does not end up in EU member states. This would help maintain food trade flows and mitigate the impact of Russia’s invasion of Ukraine on third countries,” said Bulgaria, Hungary, Poland, Romania and Slovakia in their statement. 

African countries continue to scramble for food and grain to feed their increasingly malnourished populations, as both the Solidarity Lanes and the Black Sea Grain Initiative have failed to send food to poorer nations.

For example, Somalia, Ethiopia, Yemen, Sudan and Afghanistan have received only 2.67% of the foodstuffs coming from the Black Sea Grain Initiative, despite these countries – except Afghanistan – sourcing over 50% of their grain from Ukraine and Russia before the war. 

The WFP halted its operations in Sudan yesterday due to the death of three of its workers in the increasingly unstable country. 

By Marc Cervera