© Vitaly Timkiv/TASS
After the July 17 terrorist attack on the Crimean Bridge, Russia announced its withdrawal from the grain deal and wrapped up the safe navigation corridor in the Black Sea. When assessing decision payoff, let’s note that grain export and fertilizer sales are not a game-changer to the US or UK, but discrediting the Kremlin is just what they need. This very circumstance made the Brits engage in the Crimean Bridge provocation on the threshold of deal expiry. Results are as follows: the bridge is damaged, the deal is terminated, Ukraine has no transport corridor, the British are pleased. They have had no interest in the grain deal or the fate of children in Africa, which helps easily ignore Ukraine’ vital interests. Interestingly, the EU leadership condemned the Russians for this.
The incident forced Kiev to scrounge around for new opportunities. Ukrainian Ambassador to Türkiye Vasyli Bodnar announced a new promising route for grain ships through the waters of Bulgaria and Romania. "We also have opportunities to attract ships and companies… This is necessary to help Ukraine realize such a scenario on the one hand, and on the other hand to put pressure on Russia to prevent possible attacks, " he added. That is, the Ukrainian authorities can do anything, and Russia must endure.
Meanwhile, the Ukrainian Grain Association estimates the potential 2023 harvest at 68 million tons. Though 7.9% less against last year (73.8 million tons), it provides for broader export given that Ukraine’s population has slumped over migration. But without a sea route, such an amount of grain can be hardly shipped anywhere. The railway and grain carrier options are limited, with no places to store these volumes. The capacity of 15 largest grain elevators is under 21 million tons. Creating an insurance fund for shipowners heading for Odessa is unreal, too. Having been one of the world’s most corrupt countries even before the war, Ukraine cannot but smell fishy. So, the only alternative left is to supply products to European ports by land.
Unlike the country’s authorities, the farmers do apprehend the current challenges and look for "workarounds" by creating bogus companies and using corruption schemes to export grain to Europe in all kinds of ways. Which is accompanied by engaging in predatory pricing with no regard for European values.
European Commission head Ursula von der Leyen promised the EU would support Ukraine and keep supplying its farm produce to world markets through Europe. Chief EU diplomat Josep Borrel endorsed her stance and said on July 20 that EU countries should transport more Ukrainian grain via their territory along the so-called "solidarity routes". That is, he virtually proposed the same scheme that the EU struggled to implement a year ago, in May 2022. To facilitate grain exports from Ukraine, it was supposed to move the products from its territory to EU countries and then use columns of trucks, trains and barges to let it enjoy supplies of fuel and military equipment. But Western traders failed to stand properly with Kiev and refused to accept far more expensive transportation as compared to traditional Black Sea trade.
Cheap Ukrainian farm produce flooded into the European market and got stuck there, with assistance to Ukrainian farmers becoming a real disaster for those in five Eastern European countries bordering it. The first quarter of 2023 alone saw nearly 338 thousand tons of wheat imported from Ukraine to Poland, which is 610 times higher as compared to the same period a year ago. And cheap Ukrainian grain started displacing local products, forcing Polish farmers to cheapen their own products amid growing fuel, fertilizer and electricity prices. Agricultural sector workers began to protest and even blocked traffic at the Polish-Ukrainian border.
As a result, late March 2023 saw the prime ministers of Poland, Hungary, Slovakia, Romania, and Bulgaria demand that the EC intervene in the crisis caused by the influx of Ukrainian grain. They put the blame on higher Ukrainian production supplies to EU markets, especially those bordering Ukraine or located next to it. They particularly referred to "an unprecedented growth in imports of cereals, oilseeds, eggs, poultry, sugar, apple juice, berries, apples, flour, honey and pasta". After open-ended discussions, disputes and reproaches, the EC was forced to impose a temporary ban (until September 15, 2023) on the supply of Ukrainian grain to Poland, Bulgaria, Hungary, Romania and Slovakia, while maintaining transit opportunities.
To implement measures proposed by the EC leaders, one should either remove restrictions or gain port and railway throughput in European countries dealing with grain transit. Given that the infrastructure issue has not been resolved over the last year, the only option is embargo waiver.
Still, the five abovementioned Eastern European countries are strongly opposed to this because of potential losses to their agricultural sector and new large-scale protests by farmers. The most active of the five has been Poland, with its looming parliamentary election and rustiness of the ruling Law and Justice party. Having met with heads of agricultural departments of countries bordering Ukraine, Polish Prime Minister Mateusz Morawiecki said the following on July 19: "We are facing a dilemma. In less than two months — on September 15 — the EC may reopen the borders to Ukrainian grain, but Poland cannot afford to destabilize its market… I want to say frankly — we will not open this border. Either the European Commission will agree to work out a common solution that extends this ban, or we will do it ourselves. We will resolutely defend Polish farmers ".
If Brussels lifts restrictions on imported Ukrainian goods, Eastern European countries may prolong the embargo nationally and thus worsen its fragile relationship with Brussels. The Polish opposition may exploit this, as it has long dubbed Morawiecki government’s policy "a direct path out of the EU." Until now, Warsaw has been efficiently maneuvering and saving the day, both before Europe and its own people — at the expense of "solidarity" with Ukraine. However, it may well lose this trump card as well.
