EU lifts bans on Ukrainian grain as Kyiv commits to avoid new market distortions

The prohibitions have been in place since 2 May and applied to five European Union states located in Ukraine’s periphery: Poland, Hungary, Slovakia, Romania and Bulgaria.

The countries had said the sudden increase in tariff-free, low-cost grain from Ukraine was depressing prices for local farmers after the EU suspended duties on all imports coming from the war-torn nation.

Under the restrictions, four products coming from Ukraine – wheat, maize, rapeseed and sunflower – were allowed to transit through the five Eastern countries but could not stay inside their markets for domestic consumption or storage. 

The European Commission had committed to phasing out the bans by 15 September, even if Poland and Hungary had threatened to slap their own unilateral restrictions.

Warsaw went as far as approving a resolution by the Council of Ministers and posting a video on social media featuring Prime Minister Mateusz Morawiecki.

“Poland will not allow Ukrainian grain to flood us,” Morawiecki said on Tuesday. “Regardless of what Brussels officials decide, we will not open our borders.”

Under the decision announced on Friday, mere hours before the deadline expired, the temporary bans will be lifted. In return, Ukraine agrees to introduce “legal measures,” such a licensing system, within 30 days to avoid new surges in grain exports, the Commission said in a statement. 

In the meantime, Kyiv will establish “effective measures” to control the trading flows of the four products previously blacklisted under the bans. These actions should prevent “any market distortions” in the neighbouring countries.

Ukraine has until Monday to submit a plan explaining what kind of steps it intends to take to keep their exports in check, the Commission added.

“The European Commission will refrain from imposing any restrictions as long as the effective measures by Ukraine are in place and fully working,” the statement said.

A long-running saga

Since their introduction, the bans had been a point of deepening friction between Brussels and Kyiv, which considered them to be “unacceptable” and contrary to the spirit of solidarity shown towards the country after Russia launched the full-scale war.

Several member states, including Germany, France, the Netherlands and Belgium, had raised “serious concerns” about the detrimental impact the restrictions were having on the single market, which is supposed to function with equal rules for every country.

The European Commission committed to phasing out the embargo by 15 September and working on alternative solutions, such as improving infrastructure and boosting transport capacity through the Danube River, that could somehow alleviate the strain placed on road routes after the collapse of the Black Sea corridor. 

But as the deadline approached, political pressure ratcheted up.

The five Eastern countries vocally pushed for the bans to be extended until the end of the year and possibly blacklist goods “other than cereals and oilseeds.”

Poland, the largest of the group, led the public campaign and adopted an uncompromising attitude, openly threatening the European Commission with imposing a unilateral, nationwide prohibition on Ukrainian cereals after 15 September.

The Polish opposition has been linked to the parliamentary elections of 15 October, as the ruling Law and Justice party (PiS) is aiming to attract conservative voters in the countryside. Slovakia is also heading to the polls on 30 September.

“We will extend this ban, this import ban, on a national basis, and this will become a serious fight in Brussels,” Hungarian Prime Minister Viktor Orbán said on Friday morning, denouncing traders for buying “cheaper” Ukrainian grain.

Bulgaria, however, broke ranks with the Eastern coalition and voted this week to remove the restrictions after the deadline, arguing the economic forecasts and indicators no longer predicted severe consequences for the country.

The clash between politics and farmers has proven a formidable challenge for the European Commission to manage and has been described as a litmus test for the bloc’s steadfast support for Ukraine. 

In the end, the executive chose a middle ground in which a certain level of control will remain on Ukrainian cereals but under closer supervision of Kyiv, injecting a sense of shared responsibility into the long-running dispute.

Ahead of the Friday deadline, Dmytro Kuleba, Ukraine’s foreign affairs minister, had said his government expected Brussels to “keep its word and lift all restrictions” on foodstuffs.

“No form of continuing the ban is acceptable since it would undermine the single market, the Ukraine-EU Association Agreement, and trust in EU commitments,” Kuleba said.

The Ukrainian government had also raised the prospect of taking legal action before the World Trade Organization if the prohibitions continued to drag on.

This piece has been updated to include new details about the announcement.