On September 6, the European Commission (EC) board is to consider proposals by European Commissioner for Agriculture Janusz Wojciechowski to solve the problem of Ukrainian grain exports to five “frontline” countries, Poland, Hungary, Slovakia, Bulgaria, and Romania.
The European Commissioner said this on Tuesday, September 5, in the Spanish city of Córdoba at a press conference following an informal meeting of EU agriculture ministers, an Ukrinform correspondent reports.
Grain imports from Ukraine are a very sensitive issue. It will be discussed during the meeting of the EC board, the EС’s representative said. He emphasized the need to support Ukraine regarding the transit of grain from Ukraine to more seaports. If the ban on such imports to the five frontline states is not extended, a new large-scale crisis in these border countries can be expected, he added.
He noted that Ukraine itself is suffering from low grain prices as a result of the Russian blockade of Ukrainian ports. The proposal to provide Ukraine with compensation for transit costs will help maintain the competitiveness of Ukrainian grain exports and return to traditional markets.
The Black Sea routes are currently blocked by Russia, so the solidarity lanes remain the only possible route for Ukrainian exports. This means additional transit costs. One needs to develop these routes and use more seaports. The main challenge is not infrastructure but the economic aspect. Transit is too costly for Ukrainian companies to export grain and be competitive in other markets, Wojciechowski said. He proposed to support Ukraine financially by compensating for the cost of transit.
The European Commissioner emphasized that this proposal – to extend the temporary ban on Ukrainian agricultural exports to five “frontline” countries until the end of 2023 and to provide Ukraine with compensation for transit costs – is currently his personal position, which he will present to the EC on September 6. In addition, the board will hear an update from a technical mission that has just visited Romania to explore the possibility of increasing the capacity of its ports. According to Wojciechowski, Romania is currently the main transit country for Ukrainian grain.
The EU strongly supports Ukraine. This is especially true for the five neighboring member states, their societies, and people, who have made a huge effort to support Ukraine, which is also reflected in public spending. One of the elements of this support is the opening of European markets for products from Ukraine, primarily agricultural products. So, this temporary ban on grain exports is not discrimination. It does not apply to the entire EU and is seen as a measure to prevent negative consequences for both sides. Direct imports are not good for the farmers of these “frontline” countries but also for Ukraine because it is a speculative trade, the EC representative said.
He recalled that Ukraine’s exports to the EU market currently total EUR 28 billion, of which almost half – EUR 13 billion – are agricultural products. Last year, the volume of Ukrainian agri-exports to the EU increased by EUR 6 billion, 5 of which came from the five countries bordering Ukraine, which caused a shock to their markets.
Ukraine was blockaded by Russia, and Ukrainian grain was much cheaper than prices on the global and world markets. This was used, although legally but not entirely honestly, by those traders who took advantage of this situation. Therefore, these exports are not profitable for farmers in the EU and in Ukraine, the European Commissioner said. He added that his proposal is good for Ukraine because it gives it a chance to return to normal trade on better, non-speculative markets. The EC will find the best solution that will be acceptable to all partners, including Ukraine, Wojciechowski expressed confidence.
In turn, the Minister of Agriculture, Fisheries and Food of Spain, Luis Planas, said that the issue of grain imports from Ukraine will be considered by ministers during a formal meeting of the EU Council in the second decade of September.
The EU is on Ukraine’s side. It is here to protect its interests in this war, when Ukraine is suffering from an unjustified invasion by Russia. Ukraine’s neighboring countries are also suffering and have a difficult market situation. We will see what the EС decides. A formal meeting of the EU Agriculture and Fisheries Council will be held in Brussels on September 18. This topic will be raised there as well, the Spanish minister said.