19:59 28.06.2023

Hungary agrees to ease agriculture trade with Ukraine, insists on extending period of restrictions

4 min read
Hungary agrees to ease agriculture trade with Ukraine, insists on extending period of restrictions

The European Commission should extend the ban on the import of Ukrainian grain to five European Union countries until the end of 2023, and the ban may remain in effect only for two crops - sunflower and corn, Hungarian Agriculture Minister Istvan Nagy said in Luxembourg on Tuesday after a meeting of the EU Agriculture and Fisheries Council.

The ban on imports of wheat, corn, rapeseed and sunflower from Ukraine to Bulgaria, Hungary, Poland, Romania and Slovakia, the countries most affected by Ukrainian grain imports, took effect on May 2. This ban substituted unilateral decisions of these five countries neighboring Ukraine banning imports of Ukrainian grain. That said, there is no ban on the transit of Ukrainian agriculture products via these five countries. Initially, the ban was in effect until June 5 but was later extended through September 15. Some EU officials voice an opinion that this ban should further be extended.

"The ban on the import [of Ukrainian grain] only makes sense from an economic standpoint if it is maintained at least until the harvesting and storage of the new crop. In the case of wheat and rapeseed, this can be done by September 15, but not in the case of corn and sunflower. The logical step is therefore to extend the EU import ban until December 31, at least for these two products," the Hungarian Agriculture Ministry's press service quoted Nagy as saying.

Before the start of the EU agriculture ministers' meeting, the agriculture ministers of Bulgaria, Hungary, Poland, Romania and Slovakia agreed that cooperation and defending a common stance are still very important in relations with Brussels.

Nagy also said that he initiated negotiations with his French and German counterparts to discuss disruptions on the market caused by Ukrainian grain that pose problems in everyday life. "The purpose of these talks is to find common European solutions," he said.

The EU needs to prepare for the presence of Ukrainian agricultural products on the European market in the long term, which is why "it is necessary to find comprehensive, long-term solutions," Nagy said.

Ukrainian agricultural products should be delivered to the markets of third world countries where they were traditionally present, he said. By securing grain supplies to these regions, a food crisis, and consequently a migration crisis can be prevented, he added.

Further steps by Brussels ought to focus on ensuring the functioning of the Solidarity Lanes, which provide transpiration by land according to its original purpose, he said.

Hungary believes that the European Commission should introduce a progressive subsidy for transit transport fee, Nagy said. "It is necessary to achieve that we can transport Ukrainian agricultural products as far as possible from the border - not only to the internal markets of the EU, but also to the ports of Europe, so that they can also reach countries in need," he said.

Europe should open new seaports in order to be able to transport Ukrainian grain in the largest amount possible via traditional sea routes, Nagy said.

"Recently, only a small part of Ukrainian agricultural products has been transported by sea, the rest comes to Europe through us, the five countries. This also shows how much the domestic markets change as a result of the unrestricted flow of Ukrainian agricultural products into Europe," he said.

Agriculture producers in Eastern Europe started to experience problems related to excessive supplies of Ukrainian grain and other agriculture products in early 2023. The problems were largely caused by the EU's temporary cancellation of customs duties on Ukrainian grain and oil crops. This EU's measure brought about a considerable growth of agriculture products from Ukraine to neighboring countries.

Major amounts of Ukrainian food products, in particular grains, sunflower, eggs, poultry, sugar, apples and apple juice, berries, flour, honey and pasta, started to be supplied to Bulgaria, Hungary, Poland, Romania and Slovakia which resulted in a drastic drop in prices and inflicted to blow on local farmers there.

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