Mintec has learned that the European Commission has allegedly shared draft legislation with Poland's agricultural minister, Robert Telus, regarding Ukrainian exports. The proposed legislation aims to impose limitations on the import of sunflower seed, rapeseed, wheat, and corn until 15 September 2023. These restrictions would not be confined to Poland but would also extend their reach to Bulgaria, Hungary, Romania, and Slovakia. These countries had previously voiced concerns about the influx of low-priced Ukrainian commodities, including rapeseed, sunflower seed, and wheat, which had adversely affected domestic prices. Consequently, numerous farmers found themselves grappling with prices that fell below the cost of production.
In response to the challenges faced by these nations, the EU has devised a €100 million package to provide support. Should the new import limitation be swiftly enacted, as suggested by Poland's agricultural minister, potentially emerging as early as June 6, 2023, it could lead to further restrictions on where Ukrainian exporters can market their grains and oilseeds. This, in turn, may intensify downward pressure on Ukrainian prices due to the combination of substantial stocks and a diminished pool of potential buyers. As a result, Ukrainian sellers may need to consider reducing prices to attract buying interest from alternative origins, thereby leading to a potential decline in commodity prices originating from Ukraine.
This issue assumes critical importance as some market players have even gone so far as to suggest that a move towards implementing further limitations or even a ban could potentially trigger a wave of bankruptcies among Ukrainian farmers.