Grain exports to Ukraine: how to break the deadlock?
While the Black Sea grain agreement has been extended in extremis for two months this Wednesday, May 16, and that several Central European countries have decided to only authorize the only transit of Ukrainian grain, The future of Ukrainian grain exports remains in doubt on all sides. The FARM Foundation takes stock.
The European Union remains at the forefront
Throughout this year, which has seen the blossoming of numerous initiatives and substantial financial support to get grain out of Ukraine, Ukrainian markets have remained inevitably focused on the European Union. It was the destination of 44,130 tonnes of Ukrainian wheat exports and 63,130 tonnes of Ukrainian corn exports between February 2022 and February 2023., or 5.7 MT of wheat and 16.7 MT of corn. This has pushed the countries most dependent (in Africa, the Middle East and Asia) on Black Sea wheat to turn even more towards their main trading partners, the European Union and Russia.
A calm end to the campaign for the moment...
So far, abundant global supply has been enough to meet this demand, but the bill remains high for importing countries. The current unprecedented situation is due to the fact that 60 % of these volumes imported by the European Union flowed into the markets of Central European countries*, which imported almost no Ukrainian grain before the war. These countries face immense logistical challenges in transporting and storing this grain, but especially in reshipping it. The unilateral decision taken by these countries on April 19, 2023 illustrates the extent of this logistical impasse. For the time being, grain flows are showing a lull at the end of the campaign., while global prices remain on a downward trend.
…before the storm?
But the future of Ukrainian grain flows remains in doubt on all sides. On the one hand, Russia has threatened to withdraw from the Black Sea grain agreement – until an agreement is reached. in extremis this Wednesday, May 16 for a period of two months -, which would have risked closing the shipping routes that allow 2.5 to 3.5 million tonnes of grain to leave Ukraine every month. On the other hand, the reshipment of 2 million tonnes of cereals which pass through the Solidarity lanes The EU's trade dispute is also not resolved. Unilateral restrictions imposed by Central European countries suggest a slowdown in land exports.
The challenge is therefore twofold : to get grain out of Ukraine, but also out of the European UnionThe meeting of the next "Agriculture and Fisheries" Council of the European Union on May 30th should lead to proposals for resolving the crisis in Central Europe, while some African countries dependent on Black Sea cereals are trying to negotiate aimed at easing the conflict.
*: Poland, Romania, Bulgaria, Hungary and Slovakia
