WARSAW-When global grain prices started falling last year after a spike in the first months of the war in Ukraine, Poland’s then agriculture minister urged farmers to hang onto their harvests in the hope of a rebound and better returns.
The bet backfired badly for some.
Farmers in Poland and other eastern European countries who held out for higher prices have been hit by a perfect storm.
A jump in exports from Brazil and Russia helped to drive global grain prices lower while the EU opened its borders to tariff-free Ukrainian grain imports in a show of solidarity after Russia blocked the country’s Black Sea ports.
While the EU’s aim was to give Ukrainian farmers an outlet to ship grain and oilseeds to their traditional markets in Africa, the Middle East and Asia – and help ease a global food crisis – much has remained in Eastern Europe.
With a dearth of local produce in Poland, millers and livestock producers desperate for grain turned instead to a flood of imports from Ukraine ferried into the EU by trucks and trains, grain traders and farmers said.
Eastern Europe’s governments have pointed the finger of blame for its farmers’ woes at Ukraine, but Adrian Wawrzyniak, spokesman for the Polish Trade Union of Individual Farmers, said some of the region’s troubles were self-inflicted because farmers, encouraged by politicians, had hoarded crops.
“This led to lower sales during the harvest and storage of cereals by farmers, the consequence of which they are paying for today with a reduction in income from the sale of cereals,” he said.
Local buyers had plenty of alternative supplies.
After opening its borders to Ukrainian grain, Poland imported 2.08 million tons of maize and 579,315 tons of wheat last year, up from just 6,269 tons of maize and 3,033 tons of wheat in 2021.
“Since the farmers did not sell, (feed and flour mills) just bought Ukrainian grain to have raw materials for current production,” said a Polish grain trader who declined to be named because he is not authorized to talk to the media.
Despite being a staunch ally of Ukraine, Poland banned Ukrainian grain imports in April in response to furious complaints from farmers in its rural heartlands where support for the ruling Law and Justice (PiS) Party is strong.
Hungary, Slovakia and Bulgaria quickly followed Poland’s lead, sparking a row with Brussels over trade policy and demands for compensation for their angry farmers from EU funds.
The unilateral import bans were lifted last week but only after the European Commission agreed to block sales of Ukrainian wheat, maize, rapeseed and sunflower seed within those four member states and Romania from May 2 until June 5.
But the issue is unlikely to go away.
Negotiations with Russia to extend a deal allowing some grain exports through three of Ukraine’s Black Sea ports to alleviate a global food crisis are hanging in the balance.
If the grain corridor due to expire this month were to collapse, Ukrainian farmers would have little option but to send all their grain exports through eastern Europe.
Grain traders said the price paid for Ukraine’s grain was in line with European market levels, but they have fallen well below the prices sought by many farmers in eastern Europe.
European wheat prices hit post-harvest highs in October 2022 of more than 350 euros a tons but since then prices have dropped to pre-invasion levels of about 235 euros.
That’s also a far cry from the peak of 450 euros a tons for European wheat in the immediate aftermath of Russia’s attack.
“The farmers blame the government for low prices due to Ukrainian imports, which is not really true,” the Polish grain trader said.
Ukraine’s farmers, meanwhile, said they receive far less than the market price, as about 100 euros a tons is deducted to cover transport to eastern Europe, far higher than the costs of shipping their grain out of Black Sea ports. – Reuters
