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Ukraine Agrees With Poland On Grain Transit, But Black Sea Deal In Doubt

By Reuters
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Ukraine Agrees With Poland On Grain Transit, But Black Sea Deal In Doubt

Poland has agreed to lift a ban on the transit of Ukrainian grain and food products, but Ukraine said a wartime deal allowing it to safely ship grain from Black Sea ports was still under threat.

Failure to resume exports into eastern European countries or secure an extension of the Black Sea grain deal would trap large amounts of grain in Ukraine, hitting its exports and causing further economic problems for Kyiv as it battles Russian troops.

European Union member states Poland, Hungary and Slovakia have imposed import bans to protect their markets from an influx of cheaper supply following the Russian invasion of Ukraine, and Warsaw banned their transit through Poland at the weekend.

But Polish agriculture minister Robert Telus said a second day of talks in Warsaw had produced a breakthrough, with transit to be monitored and sealed. The deal will go into force at midnight on Friday, development minister Waldemar Buda said.

"We were forced to close the border because the EU had its eyes closed on large amounts of grain flowing into Poland, but at the same time we continued talks with Ukraine on how to enable transits, but with a guarantee grains would not be stuck in Poland, and we managed to find a solution," Telus told a news conference in Warsaw.

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Terms Of The Deal

Ukrainian first deputy prime minister Yulia Svyrydenko told the news conference she was confident Ukrainian exporters would respect the terms of the deal agreed with Poland.

It was not immediately clear how the other countries that have imposed import bans on Ukraine would react after the agreement in Warsaw, with Romania looking likely earlier on Tuesday to impose a similar ban.

Large quantities of Ukrainian grain have been trapped by bottlenecks in eastern and central Europe as low global prices and demand mean grain cannot easily be sold on.

The bottlenecks have reduced prices and hurt sales by local farmers, putting political pressure on governments in the region, particularly the Polish government before an election.

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The EU has criticised member states for putting individual bans in place, and EU envoys are set to discuss the measures on Wednesday, a senior EU official said.

Bulgaria has also been considering a ban. Czechia has said it will not impose a ban on its own but wants an EU solution.

Black Sea Grain Deal In Doubt

Ukraine, which relies on grain and food sales for a significant slice of its gross domestic product, also has concerns about the Black Sea Grain Initiative brokered between Moscow and Kyiv by Turkey and the United Nations last July.

The initiative, intended to alleviate global food shortages by allowing exports to resume from three ports that had been blockaded in Ukraine, is set to expire on May 18.

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It is unclear whether it will be extended because Russia says a separate deal meant to ease its own agricultural and fertiliser exports has not been upheld.

"It is under threat of being halted and Russia has again blocked the inspection of ships," Svyrydenko told the news conference in Warsaw.

"It is extremely important for us to unblock transit, otherwise Ukraine will remain blocked. We cannot together with our partners give Russia the opportunity to take advantage of this situation," she said.

Russian news agency RIA said on Tuesday the inspections had restarted but a senior Ukrainian official told Reuters, 'Nothing has been resolved.'

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UN spokesman Stephane Dujarric said there had been no ship inspections on Monday or Tuesday.

Russian foreign minister Sergei Lavrov will discuss the Ukraine Black Sea grain export deal with UN Secretary-General Antonio Guterres in New York next week, Russia's UN envoy said on Tuesday.

News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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