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How EU halt of Ukrainian grain imports could impact global food supply

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18 Apr, 2023 12:26 HomeBusiness News How EU halt of Ukrainian grain imports could impact global food supply A growing number of Eastern European countries have been seeking to protect their domestic markets against a massive influx of supply

A number of EU states have begun blocking imports of Ukrainian grain and other agricultural products in an attempt to mitigate the threat faced by local farmers due to domestic markets being flooded with supply. RT explores the issue over the measures being taken over Ukrainian grain and what it could mean for global food security.
 

  1. What’s the issue?
    Some EU states have been citing the need to protect local markets from “destabilization” caused by an influx of cheap goods from Ukraine. Local farmers in a number of countries claim to have suffered substantial financial losses due to the glut of Ukrainian grain. The Polish Agriculture Ministry said a ban on grain imports from Ukraine was necessary to “open the eyes of the EU to the fact that further decisions are needed that will allow products from Ukraine to go deep into Europe, and not stay in Poland.” 
  2. Which EU countries have stopped importing the grain?
    The problem has been felt most acutely by the members of the bloc that share a border with Ukraine, although several other states have joined in demanding action from the European Commission over Ukrainian agricultural exports. In particular, Poland, Hungary, Romania, Slovakia, and Bulgaria have been lobbying for the reintroduction of tariffs. Meanwhile, Warsaw was the first to announce a “temporary ban” on some imports from its neighbor, while Slovakia warned on Monday it would do the same. Several other Central and Eastern European countries have indicated that such a step was under consideration.
  3. Why was the grain being shipped to those countries?
    The EU allowed imports of Ukrainian agricultural goods to help Kiev financially amid the ongoing conflict in the country. All tariffs and quotas were lifted on Ukrainian grain exports to the bloc’s 27 member states in order to enable the further transit of the grain to global markets. However, much of the supply has ended up getting stuck in Eastern European countries, where it ends up in competition with local produce.
  4. What’s the EU’s stance on its members’ import bans?
    Brussels has rejected the bans, calling unilateral action on trade by EU member states unacceptable. The European Commission earlier said it had approved an aid package worth €56 million ($61 million) to support farmers in frontline countries who have to deal with the consequences of a large amount of agricultural and food goods from Ukraine entering the bloc. However, that money will not be enough. According to European Commission estimates, farmers from Poland, Romania, Hungary, Bulgaria, and Slovakia have lost some €417 million ($451 million) over the past year due to the oversupply of grain caused by Ukrainian supply.
  5. How would the bans affect Ukraine’s export of its grain?
    The protective measures being taken by a number of EU states could exacerbate global food shortages, particularly if the Black Sea grain deal is not extended. The agreement, which was reached last July between Russia and Ukraine and brokered by the UN and Türkiye, was intended to help resume shipments of grain from Ukrainian ports. The deal was already extended once but now is set to expire on May 18, and there is significant uncertainty about the prospects for an extension.
  6. How could that affect the global market?
    Experts say the combined impact of the bans and the potential failure to agree an extension to the deal would leave millions of tons of grain stranded inside Ukraine, potentially causing food shortages in poor countries. The reduced supply to markets could lead to a jump in prices. The UN warned earlier this month that food insecurity remains at unprecedented levels.

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