EU export ban to lapse as Ukraine agrees to ‘avoid grain import surge’

15 Sep 2023 | Tim Worledge

A statement from the European Commission has confirmed that the bloc will allow the current restrictive measures imposed on Ukrainian grain exports to expire after the country agreed to introduce legal measures to monitor the pace of imports to the European Union.

A press release hailed the “constructive attitude of all participants” with the decision coming after the bloc’s executive body stating that it had analysed data relating to four key categories of agricultural exports – corn, wheat, rapeseed, and sunflower.

The embargo was introduced following complaints from five neighbouring EU member states that complained that the flow of Ukrainian exports into their markets had depressed prices.

Spearheaded by agricultural powerhouses of Poland, Bulgaria and Romania, the quintet were completed by Hungary and Slovakia who successfully lobbied the bloc’s governing bodies into imposing a ban on May 2.

Initially the exceptional and temporary measures were expected to last through to June 5 but were subsequently extended to September 15 amid ongoing complaints from bordering states.

However, the press statement agreed that the work of the Coordination Platform and the imposition of the temporary measures “the market distortions” had been addressed and that cross-border flows were now successfully operating, and volumes increasing.

Under the terms of the agreement, Ukraine has undertaken to introduce unspecified legal measures within 30 days to avoid a surge in grain imports to neighbouring states.

Ukrainian authorities have until September 18 to put a proposed action plan to the Coordination Platform – an agency that brings together high-level officials from Ukraine, the European Union and members of the G7 economies.

The EC and Ukraine will continue to monitor the performance for any “unforeseen situations” and no further restrictions will be imposed until as long as the measures introduced by Ukraine are deemed to be working.

The export of Ukrainian product through EU-established ‘solidarity lanes’ has provided a vital outlet for the country’s grain and oilseed supplies in the face of Russian aggression in the Black Sea.

The blockade of the country’s deep water ports and the assault by Russian forces since the invasion began in February 2022 have curtailed free flowing exports from the country, although the UN and Turkey brokered grain export initiative re-opened three major Ukrainian ports.

However, the agreement lapsed in July when Russia refused to agree to an extension.

That has brought even greater pressure on Ukraine’s other export options, with the country reliant upon a slim export channel in the deep south of the country, along the Danube, and then cross-border exports into the EU.

But that option has brought controversy as farmers and agricultural lobby groups from the five bordering nations accused the influx of grain and oilseed exports of weighing on domestic prices.

Initially, the EU sought to calm the situation by trying to ensure that the cross-border flows headed on to European export ports without hurting domestic markets, but ultimately was forced to introduce restrictions earlier in the year.