It is disgusting to see Russia militarizing the food supply in this way. It is also a foolish task to try to persuade Putin to abandon a successful policy. It’s the war. Ukraine can only resolve the problem with the help of its allies, and this will be difficult to achieve even if they remain united.
The problem is that when Moscow withdrew from the Black Sea Grains Initiative in July, the West expected a sharp rise in global grain prices to follow, prompting countries like India, China, Egypt and Indonesia to strengthen Putin. the agreement. This is exactly how the initial initiative in 2022 was born.
But the analysis of raw materials carried out in Washington and Brussels was wrong. Thanks largely to a bumper Russian harvest, wheat prices plunged in September to their lowest level in two years. The countries of the South have therefore remained conspicuously silent, and Russia is even trying to set a floor price to increase its revenues. At the same time, agriculture represents 10% of the Ukrainian economy and is an important source of hard currency; the inability to export wheat is a hard blow for the country.
The Kremlin prevented Ukraine from escaping its blockade by bombing Danube ports and grain silos whose capacity kyiv had increased. Ukraine’s attempt to create its own grain corridor, having ships skirt the Black Sea coast to avoid attacks, is valiant but meaningless. The quantities involved so far are too small.
That leaves Ukraine with only the land route through Eastern Europe to get its vast crops to market, but it has in the past driven down local wheat prices in Poland, Hungary, Slovakia and elsewhere, thereby harming agricultural incomes. When the European Union on Friday lifted the ban imposed in May 2023 on Ukrainian exports of wheat, corn, rapeseed and sunflower seeds to Bulgaria, Hungary, Poland, Romania and Slovakia, three of these governments rebelled.
Brussels and kyiv insist prices will not fall again. But even transit through Poland and its neighbors — theoretically allowed by the ban — can depress prices as Ukrainian grain competes for export capacity, pushing more supply into local markets.
There are three ways Ukraine and its allies can respond to Putin’s grain war, but none are attractive.
First, they can wait until February-March to see how the next season’s crops will come out of winter, in the hope that global grain prices will rise again and Putin’s window of opportunity closes. But there is no guarantee that the next Russian harvest will not be as good as the last, and in the meantime, Ukrainian farmers need certainty to be able to plant.
A second option would be for the EU to flood Eastern European farmers with cash, compensating their losses. This sets a costly precedent. Third, the West can give in to Putin’s conditions for restoring the grain deal by lifting some sanctions against Russia.
Ukraine’s frustration at being stuck in this way partly explains why relations between kyiv and Warsaw deteriorated so quickly. Ukrainian farmers must sell their crops now, and Poland fears this will harm its own farmers. Despite this, Zelenskiy must step back to avoid further damage.
Poland’s Law and Justice party has been one of Kiev’s strongest supporters since the start of the war, due to the government’s deep fears of Russia, but this has created an inherently unstable situation. A populist, nationalist, anti-immigration, EU-skeptical government, with an almost paranoid view of its neighbors, has become the linchpin of European support for Kiev. Poland has sent just under 20% of its own weapons stockpiles to help Ukraine’s defense and has taken in at least 1.6 million refugees, around a million of whom remain in the country.
Overall, Poland spent more as a percentage of its gross domestic product to support Ukraine than any other country. It’s a good investment, but now Law and Justice faces a tight race for re-election on October 15 and is under attack from a party even further to the right, due to the high cost of supporting Kiev. With just weeks to go before polling day, the government is taking no chances thanks to its strong support among rural voters.
Zelenskiy should have understood both the population and the political circumstances he faced. Instead, Ukraine said it would sue at the World Trade Organization, and Zelenskiy called Poland out at the UN – but not by name – for helping to “prepare the ground” for Moscow. Polish President Andrzej Duda was even more intemperate, comparing Ukraine to a drowning man who kills his savior.
kyiv officials say they are right: All three countries are breaking EU trade rules and harming a country at war. But in Ukrainian circumstances, being right is not the same as being wise. The risk of war fatigue setting in among kyiv’s allies is significant and a keystone of Putin’s victory strategy. This is a narrative that Zelenskiy cannot afford to feed.
Poland must also reconsider its decision. The war gave it a stature in Europe that it had rarely had before. Countries like Germany and France had to admit that they were wrong – and that Poland was much closer to the truth – about the danger Putin posed to the continent’s security.
Slovakia may have shown the way on Thursday, agreeing to end its ban if Ukraine implemented a licensing system to control flows. The Polish Minister of Agriculture also agreed to negotiate to find a solution in the coming days, according to a statement published on the website of his Ukrainian counterpart.
Fortunately, Morawiecki said Poland would not interfere with the transit of weapons to Ukraine from other allies, and a government spokesperson said Thursday that Poland would continue deliveries it already had promised. Because if Warsaw is right about the Russian threat, weakening the alliance around the defense of Ukraine for political campaign reasons would be unforgivable.
Read more from Bloomberg’s opinion:
• Azerbaijan has won the war, but a bigger test is just beginning: Marc Champion
• When governments inadvertently risk a food crisis: Javier Blas
• Germany’s economic miracle is now Europe’s malaise: editorial board
This column does not necessarily reflect the views of the editorial board or Bloomberg LP and its owners.
Marc Champion is a Bloomberg Opinion columnist covering Europe, Russia and the Middle East. He was previously Istanbul bureau chief for the Wall Street Journal. He was also an editor at the Financial Times, editor-in-chief of the Moscow Times and correspondent for the Independent in Washington, the Balkans and Moscow.
Javier Blas is a Bloomberg Opinion columnist covering energy and commodities. A former Bloomberg News reporter and commodities editor at the Financial Times, he is co-author of “The World for Sale: Money, Power, and the Traders Who Barter Earth’s Resources.”
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