EU extends targeted bans on Ukrainian grain until mid-September

The European Commission decided on Monday evening to extend until 15 September a series of exceptional bans on tariff-free imports of Ukrainian grain, whose influx has been credited with depressing prices in Eastern Europe and sparking the anger of local farmers.

The bans are targeted and apply only to the circulation of wheat, maize, rapeseed and sunflower seed coming across five countries in Ukraine’s periphery: Poland, Hungary, Slovakia, Romania and Bulgaria.

The extension was approved despite the objections voiced by the authorities in Kyiv, including by President Volodymr Zelenskyy himself, and the “serious concerns” raised by Germany, France and 10 other member states in a joint letter.

“These measures continue to be necessary for a limited period of time given the exceptional circumstances of serious logistical bottlenecks and limited grain storage capacity ahead of the harvest season experienced in five member states,” the European Commission said in a statement.

The bans stem from a deal struck between the European Commission and five Eastern European countries, who had complained about mounting economic losses caused by the grain glut.

As part of its assistance to Ukraine, the European Union suspended all duties and tariffs on the imports of products, such as vegetables, fruits and meats, covered under the EU-Ukraine Association Agreement.

The controversy came to a boil in April, when four of the five concerned countries imposed unilateral measures on a wide range of Ukrainian foodstuffs, going well beyond wheat and maize. 

The dispute caught Brussels by surprise and raised questions on how long the bloc’s political solidarity with the war-torn nation would last.

Following behind-the-scenes negotiations, the European Commission reached a deal with the five countries on the condition of releasing a €100-million support package for farmers in Poland, Hungary, Slovakia, Romania and Bulgaria.

The agreement introduced “exceptional and temporary preventive measures” on four Ukrainian products – wheat, maize, rapeseed and sunflower seed – that Brussels considered to have the strongest disruptive effect.

These products are allowed only transit through the five Eastern countries, meaning they cannot be stored in their territory nor purchased for domestic consumption.

Instead, they are sent directly to other member states or shipped to low-income nations around the world.

In practice, the “preventive measures” amount to a legalised ban, designed to replace the unilateral restrictions with a coordinated approach. 

Hungary, however, has not yet fully lifted its national prohibitions.

According to the original deal, the only-transit bans were scheduled to last until 5 June, coinciding with the one-year extension of the tariff-free system for Ukraine.

In the days leading up to the deadline, the European Commission gave vague answers regarding the future of the “preventive measures” and insisted its decision would be based on economic data from the ground.

Ukraine has publicly denounced the bans, calling them “absolutely unacceptable,” and lobbied EU officials to have them lifted.

Separately, a group of 12 countries, including Germany and France, sent last month a joint letter in which they raised “serious concerns” about the grain deal, its possible incompatibility with the EU’s commercial rules and its lack of transparency.

“We are in favour of finding European solutions to take account of the difficulties encountered by certain member states. However, the integrity of the internal market cannot be an adjustment variable,” the 12 countries wrote in the letter, seen by Euronews.

The objections did not deter Brussels from extending the bans, a decision announced only four hours before the deadline.

The only-transit measures will apply to the same four agricultural products but will exclude sowing seeds.

In its statement, the European Commission said the restrictions will be phased out by 15 September but could be reassessed before then if the circulation of Ukrainian cereals is “impeded by unduly burdensome requirements” in one of the five Eastern European countries.

“The European Commission will not hesitate to act in case national trade bans prevent Ukrainian agricultural goods from reaching countries where they are needed,” said Valdis Dombrovskis, the executive vice-president in charge of trade.

Mindful of the political explosiveness of the issue, the executive has set up a coordination platform gathering representatives from Poland, Hungary, Slovakia, Romania and Bulgaria, as well as Ukraine, to monitor market trends on a regular basis.

The platform’s first meeting took place on Friday.