Ukraine Sees EU Grain Debate as More About Politics Than Trade

(Bloomberg) -- A push by several European Union member states to limit the import of grain from Ukraine is politically motivated and not an economic problem for those governments, the country’s agriculture minister said.

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Mykola Solskyi is set to address EU agriculture ministers meeting in Brussels on Tuesday as the bloc remains stymied over an extension of preferential trade measures for the war-torn nation. Several member states have said the most recent proposal doesn’t do enough to address the disruptive flow of Ukrainian grain, a charge that Solskyi disputed.

“In my opinion, as of today, this is not a trade issue,” he said in an interview in Brussels on Monday. “It is first of all political, to meet the demands of farmers in the EU. If we take the numbers and look at the situation objectively then I think 80% of questions that are being discussed will be lifted.”

Solskyi plans to meet with France’s agriculture minister and will then go to Poland, where he will also address farmers, who have been most vocal in protests urging their government to also halt the transit of Ukrainian grain.

Read more: Europe’s Support for Ukrainian Wheat Gets Farmers Even Angrier

Farmers, who have been staging demonstrations across Europe in recent weeks over Ukraine’s imports and the EU’s regulatory burden, are planning another protest in Brussels on Tuesday outside the agriculture ministers meeting.

The EU is still wrestling with how to continue supporting trade with Ukraine without hurting its own farmers. On the table is a one-year extension of the so-called autonomous trade measures that give Kyiv almost unfettered access to the EU market. The clock is ticking for a deal, with the current trade breaks set to expire on June 5.

Under the most recent plan, which has yet to be approved by EU member states, tariffs would be restored if there’s a surge in imports on products including corn, poultry, sugar and eggs above the average trade volumes of the past two years. The proposed safeguards, however, don’t include grain, a step demanded by Poland and France.

The EU imported more than 17 times the amount of soft wheat from Ukraine in the 2022-2023 season compared with the previous year, before the war, according to French agency Intercereales.

Solskyi said that the “Ukrainian factor” isn’t the main one driving down global prices because good harvests elsewhere, including in Brazil and Argentina, are carrying more impact.

During his visit to Poland, Solskyi said his message will be for the “Polish society and farmers to understand that there are many myths in this situation.” In recent weeks, Polish farmers have blocked border crossings with Ukraine, as well as to Lithuania and Germany, demanding protection from Ukrainian imports.

Read more: Poland May Close Border For Trade With Ukraine to Calm Protests

“If we talk about transit through Poland, grain is practically not going there at all. All the monthly transit equals about one day of Odesa ports’ operation, about 250,000 tons. It is not critical,” he said. “However, this blockade impacts other products, provokes wrong emotions, on which we need to spend time and this is not the first thing we should be doing with the Polish government.”

Solskyi said that if talks fail, there is an option to retaliate through the World Trade Organization but “we wouldn’t want to do it.”

Forecasting production, Solskyi said that Ukraine will produce 5%-10% less wheat this year because a smaller amount of land was sowed, while the rapeseed harvest is expected to be at the same level as last year. Similar volumes are expected on corn, oilseed and soybeans, he added.

Read more: EU Proposes Imposing Punitive Tariffs on Russian Grain Imports

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