The Grain Glut is limiting the goodwill that Ukraine badly needs

Blockaded border crossings, a minister covered in eggs and silos full — farmers in Eastern Europe are growing angry at the Ukrainian rush for grain, which they say is threatening their livelihoods and is steadily eroding their political goodwill.

Poland and other countries in the vicinity agreed to assist with grain transportation from Ukraine to international markets following the Russian invasion of Ukraine last year. It’s threatening local livelihoods and a large part of that supply is currently piling up in Eastern Europe.

Infrastructure bottlenecks and farmers delaying the sale of last year’s produce have created the surplus. Protests are erupting over the hoarding of grain, which is now a political issue.In anticipation of rising prices, local growers kept their crop. Instead, a wider global downturn has driven prices down. This has left farmers in Poland and Slovakia, Hungary, Slovakia, Hungary, and Bulgaria with lower revenues and unable to clear their stocks before the new harvest begins in the summer.Political leaders who initially rushed to help Ukraine are now complaining.

“We must help Ukraine transport and sell grain to countries outside of the EU,” Mateusz Morawiecki (Polish Prime Minister) said in a Facebook posting. He had offered $20 million four months ago to help Ukraine export grain to Africa. “But this cannot happen at the cost of Polish farmers or local markets.”

He stated that the European Commission must limit Ukraine’s supply to the European Union as it destabilizes local markets.The wheat trade is more than 10x greater than in the previous year

The glut is largely a local problem. As a result of the deal to obtain grain from Black Sea ports, Ukraine’s exports to global market are still low.

Russia’s invasion of Ukraine raised concerns about an increasing hunger crisis. Food prices rose to new records, with huge amounts of Ukraine’s vegetable oil and grain stranded. To keep supplies flowing, governments had to step in and make eastern Europe a transit route. Although some ports have been reopened, the speed of shipment is restricted. Transport by rail and road remains vital.

From just 100,000 tons in previous years’ imports, Poland saw 2.45 million tonnes in 2022. This was a huge undertaking for the rail network. Because tracks in Ukraine were different, rolling stock needed to be modified. This caused delays in shipments. After Russia’s ban, Poland had to import coal and was given priority on trains.

Henryk Kowalczyk, Poland’s Agriculture Minister, told producers not to sell their grain in June because it is unlikely that prices will fall. However, Chicago benchmark wheat futures are now almost half of what they were in June, when records were set just after the war broke out. This was due to huge harvests in key shippers like Russia and Australia that dispelled fears about a shortage.

According to Helene Duflot (Wheat analyst at Strategie Grains), Grain import demand is decreasing in key regions such as North Africa, one of the EU’s main markets for wheat, because economies there are struggling.Kowalczyk was accosted by a group consisting of yellow-vested farmers who were blowing whistles and dressed in yellow vests at an agricultural fair in Kielce, southern Poland on March 17. He was forced from the premises.

Five days later, Kowalczyk was heckled and pelted in eggs at a panel discussion with Janusz Wojciechowski, EU Agriculture Commissioner. The meeting took place in Jasionka, which is just two hours from the Ukraine border. Kowalczyk had earlier this week agreed to a plan that included at least 10 million zloty ($2.3billion) in aid and a promise to increase the port capacity.

Farmers are however not giving up and promising to continue protests until the situation improves in the next two to 3 weeks.

Political consequences may result from discontent. Poland and Slovakia will be facing elections in the coming months, and farmers make up a significant part of these constituencies. The polls show that the former Slovak premier, who opposes Russia’s sanctions and weapons delivery to Ukraine, is leading. The situation in Bulgaria is similar, and polls are due this weekend. More than one million Ukrainian refugees have been accepted by Poland, which has also contributed the most to humanitarian and military aid to Kyiv.

Romanian farmers protested in Brussels Wednesday against the European Commission building. They wave banners that stated “Romanian Farmers Deserve respect!” Romania, which is one of the EU’s largest wheat and corn producers, has helped to facilitate more than half the Ukraine’s grain exports via land since the beginning of the war.

Razvan Filipescu (vice-president of Association of Farmer Producers of the Dobrogea) said that imports increased to 570,000 tonnes last year, from almost zero.Crops are transported by rail, road, and river, except for the Black Sea.

Klaus Iohannis stated that the crisis fund for farmers of EUR56million ($61million) was inadequate. He also criticised it for not accounting for the “huge sacrifices”, made by the Balkan nation.

Bulgaria and four EU countries around Ukraine wrote to President Ursula von der Leyen requesting that the European Commission increase financial assistance to farmers and consider buying surplus grain for humanitarian aid.

According to someone familiar with the discussions, Slovakia wants the EU and the UN to collaborate with its World Food Programme to transport Ukrainian grain out of member countries. The person did not want to be identified because they are confidential.

However, the Ukrainian supply could still play a role in addressing any European shortfalls. Last summer’s drought in Europe decimated its corn harvest and forced additional imports to make up the difference. However, imports are expected to decrease as the war affects harvests.

Alex Lissitsa (chief executive officer of Ukrainian agricultural business IMC) stated that “the whole exports from Ukraine would decrease, including to EU,”There are concerns that the grain transit agreement might also be broken.

Emil Macho, Chairman of the Slovak Agriculture and Food Chamber said that nobody oversees the gentleman’s agreement that Europe would be a transit country for Ukraine’s grain to Africa. “It’s not working. The grain is staying right there.”

Meanwhile, the anger continues to flow. Three days ago, in Bulgaria, grain producers demanded compensations after they blocked the border crossings to Romania. Krasimir Arvramov, the founder of the National Association of Grain Producers in Bulgaria, stated that almost 80% of 2022’s sunflower crop is still unsold, and that farmers have more than 3,000,000 tons of wheat left from last year.

Wieslaw Gryn (65) is a farmer who grows corn, wheat and canola on a 320-hectare (791 acres) family farm in Rogow, eastern Poland. He claims that grain prices have dropped 40%, and he still has hundreds of tons to sell.

“Every year around this time, I would have some surplus. Gryn stated in an interview that she has never seen such a large surplus like this one. “My business partners have been delaying payments, and I need the money to start growing my grain right away.

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