Grain wars


The Washington Post

In addition, Ukrainian grain has caused conflict between Ukraine and its closest allies.

Despite its enthusiastic support for Ukraine, Poland, which is at the forefront of Kiev’s allies, took an anti-Ukrainian stance on grain supplies as soon as it came to its personal interests. Thus, Polish Prime Minister Mateusz Morawiecki posted a pre-election video of the ruling Law and Justice party, in which he stated that Warsaw would not allow itself to be «flooded with Ukrainian grain» regardless of the European Commission’s decision, and that it would extend the ban on imports of agricultural products after September 15. By doing so, Poland stopped the import of Ukrainian grain to the EU common market. Morawiecki has practically issued an ultimatum to the European Commission regarding grain imports from Ukraine. In addition to grain, Poland demands that honey and raspberries should be included in the list of products banned for import from Ukraine.

Poland’s honey and raspberry relations with Ukraine ended as soon as it became unprofitable for Poles. This is how the first crack in their alliance appeared.

Since farmers are the main electorate of Poland’s ruling Law and Justice party, the issue of Ukrainian grain has become especially important for the country’s government, where elections are to be held this fall.

On September 5, the agriculture ministers of five countries — Poland, Bulgaria, Romania, Slovakia and Hungary — also met to discuss the issue of Ukrainian grain imports. At the meeting, the head of the Polish Agriculture Ministry said that the countries bordering Ukraine supported the transit of agricultural products from Ukraine, especially outside the European Union. He emphasized once again — outside. At the same time, he said that in the context of the ban on the export of Ukrainian grain to frontline countries expiring on September 15, Poland will make a decision in accordance with the interests of its farmers, and assured that «we will not allow the import of grain from Ukraine to Poland». Naturally, Ukraine perceived these statements as unfriendly.

The ban on imports of wheat, corn, rapeseed and sunflower from Ukraine to Bulgaria, Hungary, Poland, Romania and Slovakia was imposed by the European Commission in early May 2023 as a result of an agreement reached with these countries on Ukrainian agricultural products. The ban was initially in effect until June 5 and then extended until September 15. After this date, the European Commission allowed the transit of grain through the territories of the countries bordering Ukraine. Bulgaria and Romania agreed to this, while Warsaw staged a real revolt. It was joined by Slovakia and Hungary, which also decided to extend the ban on Ukrainian grain exports. Hungary went even further and imposed a ban on imports of 24 types of Ukrainian agricultural products at once.

«We waited until the last moment for the European Commission’s decision to maintain the ban, but Brussels did not listen to the requests of Eastern European farmers for help, in fact leaving it to Ukraine to decide what products and in what volume it will export to Hungary and other border countries», said Hungarian Agriculture Minister Nagy. That is, Poland, Slovakia and Hungary staged a rebellion within the EU.

Outraged Kiev accused Warsaw of deliberately creating obstacles to transit. As many as 9 meetings had to be held on the issue of Ukrainian food exports, which were attended by representatives of Kiev, five neighboring countries and the European Commission. But it was not possible to find an option that would suit Ukraine.

The conflict started as a conflict over export of Ukrainian agricultural products, but now it has turned into a conflict of political relations between Ukraine and Poland. Polish and Ukrainian officials openly clashed. Following a statement by Marcin Przydzak, Polish presidential foreign policy adviser, that Ukraine should «start appreciating the role Poland has played for Ukraine in recent months and years», Ukrainian Prime Minister Denys Shmygal responded by calling Poland’s actions «unfriendly and populist».

After Przydzak’s speech, the Ukrainian Foreign Ministry summoned the Polish ambassador for an explanation. The Poles responded immediately — and the next day they called the Ukrainian ambassador to the carpet. It got to the point where President Zelensky had to intervene in the grain issue, writing on former Twitter that «emotions definitely need to cool down». But it seems that the situation around Ukrainian exports of agricultural products shows that everyone is tired of the conflict and for each country, both for Poland and Ukraine, the most important thing is its own interests, which no one wants to sacrifice. And any long-term assistance sooner or later becomes a burden. Also, one should not forget that apart from exports, there are other controversial issues between Ukraine and Poland. Such as, for example, the assessment of the events of the Volyn massacre.

Apart from the conflict over the export of Ukrainian agricultural products, there is another important problem — how will Kiev be able to export? After Russia’s withdrawal from the grain deal, Ukraine’s transportation possibilities were sharply narrowed, and the most profitable and fastest way through the Black Sea ports was closed. Now Ukraine has started exporting grain through Croatian seaports, and some of it is shipped by rail. But railroad transportation to European ports is much more expensive. And Ukrainian grain is becoming more expensive than Russian one. In addition, since Russia does not know what supplies go through Ukrainian ports, it subjects them to bombing.

Another option Ukraine is considering is to ship its grain via the Black Sea to the Romanian port of Constanta, and from there the grain must cross a thousand kilometers of water on the Danube before reaching the Croatian river port of Vukovar. But Vukovar is not able to handle such a volume, as the European Union reports that Ukraine exported more than 30 million tons of grain and other agricultural products under the grain deal between August 2022 and May 2023. More than 1,080 ships were needed to transport such a quantity of cargo.

One more option is delivery via Croatian railroads. But, according to experts who know the condition of Croatian railroads, they are simply unable to provide Ukrainian grain exports. In general, there are no real options for solving the problem of exporting Ukrainian agricultural products except the Black Sea. And for this to happen, it is necessary for Ukraine’s sponsors and Ukraine itself to fulfill Russia’s demands, which it has put forward to return to the grain deal.

And while the closest allies, Poland and Ukraine, are quarreling and grain transporters are puzzling over how to transport Ukrainian grain quickly and cheaply and by what routes, Moscow is confidently consolidating its dominance in the wheat market due to record harvests and the low cost of Russian grain. In addition, Russian traders are step by step overcoming the financial and logistical difficulties they faced after the start of the special military operation. Russia is becoming the world’s leading grain exporter. And the announcement of the blockade of Black Sea ports has led to a sharp decline in Ukraine’s ability to export its grain, from the sale of which it received money to buy weapons.

«Russian wheat doesn’t have many competitors», said Hélène Duflo, a grain market analyst at Strategic Grains. — «At the moment, it’s Russia that determines the price».

Recently, the U.S. Department of Agriculture raised its forecast for Russian exports, while lowering its forecast for global supplies, which once again emphasized Moscow’s dominant position on the wheat market. So, having imposed a price ceiling on Russian oil to make the Russian treasury have less money, the U.S. and the European Union clearly did not expect Russia to cope with the problem with the help of its grain.