EU maize producers concerned by Ukraine export, eyeing integration as an opportunity

4 months ago 18

According to experts at the European Maize Congress, Ukraine’s revived capacity to export cereals is now raising questions about competition with EU producers, however, future integration can be an opportunity for the bloc to increase its influence on the global food markets.

Ukrainian maize was the cereal most affected by the blockade of the Black Sea export route at the start of the war. But Kyiv exports have now recovered capacity going back to pre-war levels, experts said at the European Maize Congress in Paris on 15 May.

“In addition to the port of Odessa, which set a record with 5.4 million tonnes exported last month”, Ukraine “has developed truck and rail transport via [other] corridors”, the consultant specialising in agricultural markets Arthur Portier said at the meeting.

According to Portier, after the bombing of the port of Odessa and Mycolaiv – which destroyed 4 out of 5 terminals – other ports such as Izmail and Reni in the Danube delta attracted investors. The latter has gone from exporting from zero before the war to 1.5 million tonnes of maize a month nowadays.

In addition to the ports, the road corridors ensure around 6 or 7 million tonnes per month of exports.

The concerns

Last April, the EU granted Ukraine another year’s exemption from customs duties, but combined this with “safeguard mechanisms” targeting “particularly sensitive” products, including maize and other cereals, because of the protests of EU farmers, especially in Poland.

The mechanism caps import volumes of these products at average levels imported by the EU between 1 July 2021 and 31 December 2023, beyond which customs duties will be re-imposed.

“[Two years ago] we had already asked for export certificates to be introduced for all products arriving from Ukraine, but the Commission lacked courage. Mrs Von der Leyen said that this could send out a signal that Ukraine was being restricted, but we’ve done it two years later,” said Romanian Renew Member of the European Parliament and former Commissioner for Agriculture Dacian Ciolos.

The decision not to include wheat in the mechanism is “incoherent”, said Portier, given that wheat imports from Ukraine have increased sevenfold since the start of the war.

As Europe “we are structurally an importer of maize, not of wheat,” the specialist added.

A special envoy for agricultural integration

European production growth is stagnating, estimated at around 66 million tonnes by 2024-2025, with the EU increasing its dependence on supply from Ukraine and Brazil, the expert insisted.

At the same time, maize demand is increasing worldwide, due to use in ethanol production. With Population growth in non-producing countries such as sub-Saharan Africa will only accentuate the importance of the commodity, Portier pointed out.

The EU production can hardly keep up according to Portier, because such an increase would not be compatible with the Green Deal, nor with Europe’s “aversion to science”, in other words, genome editing.

In this scenario, a hypothetical integration of Ukraine into the EU would be an opportunity.

“We would end up producing 118 million tonnes of maize, while Brazil produces 122 million tonnes. We would become a major world producer and exporter,” said Portier.

For Ciolos, “Ukraine could strengthen Europe rather than weaken it, if it is done intelligently, by getting a head start and redefining public policy.” He proposed that the EU appoint a “special envoy” to Ukraine for a period of 2 to 3 years, to ensure that policies are coherent as part of a reconstruction plan.

According to Portier, currently maize production in Ukraine is faring even better than other cereals, because, unlike wheat, 20% of which is produced in occupied areas, maize crops are mainly grown in the north of the country, and have not been affected by the war.

“The current cruising speed of 27 million tonnes produced per year in Ukraine may stabilise over the coming seasons,” concludes Arthur Portier.

Member states push for further safeguards against Ukrainian imports

With little time before the expiration of wartime trade benefits granted to Kyiv, and despite the compromise deal reached with the European Parliament last week, a Polish-led coalition of EU countries has succeeded in reopening negotiations to enhance safeguards against market distortions.

[Edited by Angelo Di Mambro and Rajnish Singh]