The export of grain from Ukraine to the EU remains a headache for the European Commission. Angry farmers in Poland and Romania blocked border crossings with Ukraine last week. The protests have now subsided somewhat, but they have had an effect. Brussels now appears to be working on a tailor-made solution in which the eastern member states will have more freedom to regulate imports.
The March wheat contract on the Matif closed yesterday €1,25 lower at €216,75 per tonne. On the CBoT, prices closed in the green last trading session. Wheat added 0,6% to $5.96½ per bushel. Corn showed the smallest increase by a quarter, closing at $4.45¾ a bushel. Soy closed 0,9% higher at $12.24¼ per bushel.
Europe was competitive against Russian wheat in several tenders last week. The Russian market seems to be responding to this. Market agency Ikar has lowered the quotation for Russian wheat by $4 to $238 per tonne. SovEcon reports that Russian grain exports fell 13% last week compared to the previous week. Russia exported 650.000 tons of grain last week, including 580.000 tons of wheat.
National import restrictions
The European Commission may allow certain Member States to introduce restrictions on agricultural products from Ukraine. The Commission should come up with adjusted trade rules this week. Various media reports that this includes 'country-specific guarantees' that give EU member states the freedom to take import-restricting measures if the market becomes overcrowded. "We are investigating how we can build in additional safeguards for Poland and other member states and one way to do that is with country-specific safeguards," APK Inform quotes European Commissioner for Trade Valdis Dombrovskis. The distribution of goods from Ukraine is not equal across the EU, according to the European Commissioner. "The import of agricultural goods from the EU is mainly noticed by the Member States closest to Ukraine, while there is no problem across the EU." The proposal presented this week should apply for a year until June 2025. The European Parliament and the Council still have to vote on it.
Ukraine is open to negotiations with the EU on trade movements, according to Ukrainian State Secretary for Economy and Trade Taras Kachka. "Roughly speaking, we have shown our potential and some EU member states are shocked by that," Kachka said at Interfax Ukraine. "There is no reason to further increase exports to the EU. Trade has already more or less stabilized." Kachka is not blind to the objections that European farmers and ministers of agriculture put forward for the import of goods from Ukraine. According to the State Secretary, the Commission must study trade flows in detail to clarify what is and is not harmful to the European Member States.