Ukrainian grain put on pause

The European Commission has reached an intermediate compromise with the countries of Eastern Europe, which have suffered from increased imports of Ukrainian agricultural products over the past year: the supply of certain types of grain from Ukraine to border states has been prohibited since May 2. However, while we are talking about the fact that the restrictive measures will only be in effect for a month, their extension for a longer period is possible, but so far it raises doubts, including because of European goals to curb inflation.

On Tuesday, May 2, the European Commission (EC) banned the export of wheat, corn, rapeseed and sunflower from Ukraine to the border countries of Bulgaria, Hungary, Poland, Romania and Slovakia. The states of Eastern Europe, in turn, pledged to lift similar bans that they had previously introduced on their own. As follows from the published statement of the EC, restrictive measures will not affect the transit of grain through border countries to other markets. The new rules will be valid from May 2 to June 5 – if necessary, the European Commission is ready to extend them for a longer period. The document states that financial support will also be provided to farmers affected by the influx of Ukrainian agricultural products – earlier, Deputy Head of the European Commission Valdis Dombrovskis spoke about the amount of €100 million (in addition to the already allocated €56 million).

Recall that in April, Eastern European countries with a difference of several days introduced restrictions on the import of Ukrainian agricultural products (see Kommersant dated April 20) – the decision was explained by the threat that the Ukrainian grain filling the markets represented for local farmers. The first joint statement of the states bordering Ukraine was published in February (see “Kommersant” of February 2) – in it, pointing to the multifold increase in imports of agricultural products (for certain types of grain from several thousand to several million tons), the Eastern European countries insisted on an immediate EU response: in particular, on the return of customs duties, payment of compensation to affected farmers and change of supply routes from Ukraine (it was about the fact that grain should not settle on European markets, but be redirected to developing countries).

At that time, there was no “immediate” reaction from the European Union – in addition to political reasons, this was also explained by economic ones: the competition of cheaper Ukrainian grain with more expensive European grain made it possible, on the one hand, to create a situation in which only profitable business remained on the market, on the other hand, to curb inflation. The latest decision of the European Commission also fits into the counter-inflationary policy: although the EU authorities recognize the plight of local producers, they are not yet ready to impose restrictions for more than a month due to price increases that may follow the rejection of Ukrainian products.

Christina Borovikova