By Nigel Hunt
LONDON (Reuters) – Poland, Hungary and Slovakia have announced bans on grain and other food imports from Ukraine to protect their local agricultural sectors.
Ukraine held talks with Poland on Monday to seek an end the bans.
WHY IS UKRAINE EXPORTING THROUGH EASTERN EUROPE?
Ukraine exported agricultural products predominately through its ports in the Black Sea until they were closed after Russia’s invasion began in February year because of a threat Russia could use the ports to land troops.
Three of the Ukraine’s ports were subsequently re-opened under a United Nations-backed pact reached in July last year to create a safe corridor for exports to help tackle the global food crisis.
Other ports, including one of the most important Mykolaiv, remain closed.
Ukraine, one of the world’s largest exporters of grains and oilseeds, has had to turn to land routes and expand trade through small Danube river ports.
The easiest land route, north through Russian-ally Belarus, has been effectively shut off, forcing Ukraine to move as much grain as possible through eastern Europe.
The European Union, to facilitate this option, announced a one-year suspension on import tariffs for Ukraine, in June 2022.
The latest bans have cast doubt on initial expectations the suspension would be extended for another year.
WHAT HAS BEEN EXPORTED?
Since the conflict began around 17 million tonnes of major agricultural products have left Ukraine by truck and trains, most of its via the border with Poland, data issued by Ukraine’s farm ministry shows.
The volume includes 8 million tonnes of corn, 2.2 million tonnes of wheat, 1.47 million tonnes of rapeseed, 1.44 million tonnes of sunoil, 1.31 million tonnes of sunseed, 1.22 million tonnes of meals and 950,000 tonnes of soybeans.
This compared to 40.6 million tonnes which left Ukraine from sea ports.
WHY ARE HUNGARY, POLAND AND SLOVAKIA BLOCKING EXPORTS?
Farmers in the eastern European countries have complained the influx of Ukrainian products has lowered prices and reduced their sales.
The Prime Ministers of five eastern EU countries – Bulgaria, Hungary, Poland, Romania and Slovakia – wrote to European Commission President European Commission President Ursula von der Leyen last month saying the increase in shipments had been unprecedented and tariffs may need to be re-introduced unless the influx could be stopped by other means.
The issue has created a political problem for Poland’s ruling nationalist Law and Justice (PiS) party in an election year as it has angered people in rural areas where support for the PiS is usually high.
The resignation of Poland’s Agriculture Minister Henryk Kowalczyk earlier this month was linked to the crisis.
HOW IS THE EU RESPONDING?
In response to individual country bans, the European Union’s executive has said such unilateral action is unacceptable.
The European Commission said it has requested information from Hungary and Poland on their import bans and is considering a second package of farmer compensation after an initial 56 million euros agreed in March.
It could also launch an “infringement procedure” that would culminate in a ruling by the European Court of Justice. The process would, however, likely take more than a year.
IS THERE A THREAT UKRAINE MAY BE UNABLE TO EXPORT?
The export and transit bans come as a war-time deal to export millions of tonnes of Ukrainian grain via the Black Sea nears its mid-May expiry with the prospects of an extension uncertain. Â
   The collapse of that deal coupled with the bans would strand millions of tonnes of grain inside Ukraine, which makes a substantial part of its gross domestic product from food sales.
In the coming years it could lead to a large reduction in the planting area and harvest as well as the closure of farms and processing plants.
(Additional reporting by Pavel Polityuk and Philip Blenkinsop; editing by Barbara Lewis)
