The price of grain tightens the rope between Ukraine and the eastern EU countries

War between Russia and Ukraine It is not only conducted on the territory occupied by the Russian army. He also does it in markets. Over recent weeks, the collateral damage resulting from measures adopted by Brussels to reduce the impact of the conflict on food security and, of course, on grain prices, tightened the rope that connects Polish farmers with their Ukrainian neighbors. The origin of the tension lies in the fact that the first, like Hungarians or Romanians, they blame the drop in the prices of their grains on the entry of Ukrainian grain without tariffs.

The rope did not break because after the meeting held a few days ago between Ukrainian President Volodymyr Zelensky; his Polish colleague Andrzej Duda, as well as Polish Prime Minister Mateusz Morawiecki the government in kiev proposed a limit on grain exports to poland resolve the internal conflict that brought the Polish Minister of Agriculture Henryk Kowalczyk a few days ago. We will have to see what will happen now in other eastern EU states like Romania, Hungary or Bulgaria, Slovakia or the Czech Republic which, like Poland in March, They requested the re-establishment of control and a 50 percent tariff on grain arriving from Ukraine.

for now, Brussels appears to be sticking with the suspension of tariffs and maximum import quotas for Ukrainian grain, a measure it adopted after the start of the war. And it seems that Spain, which will take over the leadership of the EU in the second half of the year, is ready to continue with them. At least that’s what it appears from the interview conducted a few days ago by former Polish Minister of Agriculture Henryk Kowalczyk and Luis Planas. The head of agriculture of Spain reminded at that meeting in Warsaw that there are countries that depend on Ukrainian grain to get more than 30% of the grain they consume. Spainnot going any further, It has the capacity to produce about 20 million tons of grain per year, but according to the information available to the general secretary of the Spanish Association for the Trade of Cereals and Oilseeds (Accoe), José Manuel Álvarez, “Between 36 and 38 million tons. Therefore, about 18 million tons, especially wheat or corn, must be imported annually. This is why Planas was in favor of combining actions to support Ukraine to guarantee grain production with others that minimize its impact on bordering countries like Poland.

what they want Polish, Romanian, Hungarian or Bulgarian farmers are to reintroduce tariffs make their products more expensive, directly affected, as they say, by grain that, instead of passing through their countries through the corridors of solidarity opened after the outbreak of war, remains stored within their borders. However, it is not known for sure what consequences the return of those rates would have on prices.

futures markets

It is enough to remember how it was on television after the intervention of Vladimir Putin February 24, 2022 announce a “special military operation” in the Donbass region, the price of wheat or corn began its rise on the futures market Euronext (reference for Europe) until reaching the price peak on May 16, 2022 in the case of corn (376 euros per ton, 126.5 euros more than the price reached on February 22).

And also on the Chicago Board of Trade (the oldest futures market in the world, which originally traded only agricultural products), where on May 16, a bushel of corn (a measure equivalent to 25.4 kilograms) reached $7.66. Prices started to relax in July after the Black Sea Cereals Initiative, which made it possible departure of grain from Ukrainian ports, but in mid-October the market broke. The price of wheat and corn was suspended in the overnight market in Chicago after reaching the limit of growth. Now prices they relaxed again. Euronext closed on Thursday with a price of EUR 251.25 per ton for May wheat (2.75% less than the previous day), while June corn was EUR 247.75 per ton (3.5% less than Wednesday).