Receive free EU trade updates
We’ll send you a myFT Daily Digest email rounding up the latest EU trade news every morning.
The EU has ignored pleas from Poland and ended a partial ban on grain imports from Ukraine, asking Kyiv instead to voluntarily prevent surges of produce into neighbouring countries.
Poland, Hungary, Romania and Slovakia had demanded that curbs on four grains, including wheat and maize, that expire on Friday be carried through until the end of the year to protect their farmers from cheap competition.
But weeks before elections in Warsaw and Bratislava, Brussels concluded that “market distortions” in the member states bordering Ukraine had “disappeared” since the temporary ban was introduced in May.
Defying Brussels’ decision, Poland and Hungary said they would unilaterally apply curbs on imports to protect their farmers. “The interest of the Polish farmer is the most important for us, not the Ukrainian oligarchs,” Polish deputy agriculture minister Janusz Kowalski told the Financial Times on Friday evening.
Facing this potential challenge to the European Commission’s authority over trade policy, senior EU officials called for member states to “work in the spirit of compromise”. Valdis Dombrovskis, the EU’s trade commissioner, said “the best of course would be for member states to refrain from unilateral measures”.
A majority of member states had also opposed the extension, according to several diplomats. The commission said that, in place of a formal ban, Kyiv would instead introduce “legal measures” within 30 days “to avoid grain surges”.
The expiry of the ban will appease Ukraine, which had threatened legal action against Brussels. Taras Kachka, Ukraine’s deputy economy minister, told the FT that Kyiv would challenge the EU move at the World Trade Organization if it extended the measure.
“It is important to shift from a political discussion to a cold legal assessment,” he said, adding that the bans were “not appropriate”.
Poland’s ruling Law and Justice (PiS) party needs support from its rural electorate to win a third term in office. Polish government officials have in recent days also raised the issue of Ukraine’s bid to join the EU. Agriculture minister Robert Telus on Thursday said Ukraine’s agricultural industry posed a “threat” to EU farmers and the country should not be allowed to join the bloc “without conditions”.
Telus told a press conference on Friday: “All substantive arguments were for extending this ban, but once again we see that Brussels bureaucrats are making political decisions and in this way want to harm Poland, . . . border countries, but also the European Union.”
Polish farmers held big protests at the start of this year against the government’s failure to protect them from the effects of cheap Ukrainian imports, which opposition parties also immediately seized upon. Farming association Agrounia launched a political party to denounce imports of Ukrainian cereals, and recently joined the opposition coalition led by former prime minister Donald Tusk.
Poland’s Kowalski said that Warsaw would impose its own ban from midnight on Friday, fulfilling its threat to stop Ukrainian imports whatever had been decided in Brussels. Hungary has also said it will unilaterally apply curbs.
The EU lifted quotas and tariffs on Ukrainian foodstuffs soon after Russia launched its full-scale invasion of Ukraine last year. The bloc’s move was aimed at boosting Kyiv’s war-torn economy.
In recent months, more Ukrainian grain has started arriving by land through neighbouring EU countries after Moscow pulled out of a scheme to allow exports via the Black Sea.
Russia’s withdrawal from the Black Sea grain deal in July sparked a brief rally in global grain prices, but since then Russia’s bumper wheat harvest has tempered costs, bringing Chicago wheat futures to their lowest levels in almost three years.
Whether or not the ban was extended has no impact on the Polish market, said Miroslaw Marciniak, a market analyst at Warsaw-based InfoGrain. “It is not Ukrainian grain making the prices so low, it’s the global markets.”
Bulgaria was initially in the protesting group of countries but on Thursday voted to lift the ban in an attempt to bring down domestic food prices. The government in Sofia said it would compensate farmers.
“Bulgaria sets an example of true solidarity,” Ukrainian president Volodymyr Zelenskyy wrote on social media platform X.
Additional reporting by Marton Dunai in Budapest, Roman Olearchyk in Kyiv and Barbara Erling in Warsaw, Henry Foy in Santiago de Compostela
Source: Economy - ft.com
