Kyiv's Transit Deal Search Intensifies as Ukraine Implements Grain Import Bans

The pressure is rising on Brussels to find a European Union-wide solution after Warsaw and Budapest declared bans on some Ukrainian imports over the weekend, with other eastern European countries stating they are mulling action as well.

Farmers claim that Ukrainian imports have cut their pricing and reduced their sales. In Poland, the issue has caused a headache for the ruling nationalist Law and Justice (PiS) party, which relies heavily on rural support. "Ukraine requires assistance, but the costs of that assistance should be shared by all European countries, not just the frontline countries, particularly Poland."

"We do not agree because it harms our farmers," said Polish Agriculture Minister Robert Telus when discussions began on Monday in Warsaw. Kyiv said it wants to reopen food and grain transit through Poland as a "first step" towards lifting import limits, but Telus said no solution had yet been developed to ensure that grain in transit does not wind up on the local market. Following Russia's invasion of Ukraine last year, some Black Sea ports were closed, and logistical bottlenecks held enormous quantities of Ukrainian grain, which is cheaper than that produced in the EU, in Central European countries.

The export and transit prohibitions imposed by Poland, Hungary, and Slovakia come as a pact to allow the sale of millions of tonnes of Ukrainian grain over the Black Sea, despite the Ukraine war, is set to expire on May 18. Meanwhile, Russian demands have made the chances of extending this agreement questionable. The combined effect of the prohibitions and the failure to reach an extension would leave millions of tonnes of grain stranded inside Ukraine, a major agricultural producer that derives a significant portion of its GDP from food sales.

"The first step... should be the opening of transit, because it is quite important and should be done unconditionally, and then we will talk about other things," Ukrainian Agriculture Minister Mykola Solsky said ahead of the discussions in Warsaw. Poland's ban also encompassed transit via the country, which imported 2.45 million tonnes of grain, or three quarters of total imports, from Ukraine in 2022, according to Polish Agriculture Ministry data.

The limitations have perplexed truck drivers who have been stranded for several days in huge traffic bottlenecks near the border. "We can't go in either direction at the same time." Yes, the Poles did reach out to us, and I am grateful to them. I'm grateful, as is the rest of Ukraine, and even the rest of the world. But now, for some reason, Poland refuses to let us in," Mykola Bervin, a driver from Ukraine's Zhytomyr, told Reuters. Bervin stated that he had been stuck for three days and that the tailback stretched for more than 25 miles.

Following Poland's move, Slovakia authorized banning imports indefinitely, though it maintained transit, while Bulgaria's agriculture minister indicated the country could limit imports, according to the BTA news agency. Hungary's farm minister, Istvan Nagy, stated a solution beyond the national level was required, and that ultimately EU measures were unavoidable. The Czech Republic likewise supported an EU-wide solution while stating that it would not impose a ban for the time being.

Bulgaria, Hungary, Poland, Romania, and Slovakia raised the problem with the European Commission last month, requesting that taxes on Ukrainian imports be examined, as well as an EU purchase mechanism to buy up cheap grain. Six countries, according to Telus, want to meet with the EU commissioner in charge of trade to find a solution. According to a senior EU official, EU envoys will meet on Wednesday to address Poland and Hungary's bans, after the bloc's executive stated on Sunday that unilateral action was unacceptable. According to the official, low global pricing and demand meant that grain remained in the EU rather than being sold.