28 Apr 2023 13:38

Ukrainian agricultural exports to Europe strengthen its economy - minister

MOSCOW. April 28 (Interfax) - Ukraine urges the European Union, including its neighbors, to take into account every argument and the fact that the more the EU allows Ukraine to earn the lesser financial assistance will be required while making a decision on agricultural trade, Ukrainian Agrarian Policy and Food Minister Nikolai Solsky said.

"We have always traded with Europe, and in substantial amounts. [...] The larger grain supply to Europe this year results, in particular, from the drought, which may happen again. This is the reason why European business needs more of Ukrainian grain. I mean Europe needs Ukrainian grain, especially corn, sunflower and soy meal, soybeans, and other products," the Ukrainian media quoted Solsky as saying in an article in Ekonomichna Pravda on Thursday.

Ukraine has long been a key supplier of corn to the European Union, which increased the procurement to 11.32 million tonnes in 2022 from 8 million tonnes in 2021 because of the drought.

In his words, Ukraine slightly increased sunflower oil exports to the European Union, from 1.96 million tonnes in 2021 to 2.05 million tonnes last year, while the exports of soybean oil grew from 183,000 to 214,000 tonnes year-on-year.

At the same time, Ukraine somewhat reduced exports of other agricultural products to the EU last year. These are the products Ukraine's neighbors are demanding to ban, Solsky said. According to him, Ukraine cut honey exports to the EU from 50,000 to 42,000 in 2022, alongside reduction of nut exports from 20,000 to 13,000 tonnes.

"Over that period, confectionary exports decreased from 37,000 to 28,000 tonnes, alongside a decline in pasta exports from 20,000 to 12,000 tonnes and a decline in bread and bakery exports from 47,000 to 37,000 tonnes - the list can still be continued," the minister said.

Both Ukraine and Poland have benefited from Ukrainian exports to Poland, Solsky said. In particular, Poland increased meat and dairy exports by 37% in 2022.

"There are enterprises in need for feed, and grain from Ukraine has increased the competitiveness of Polish manufacturers," he said.

In his words, Poland managed to increase poultry production by 8.2% last year and became an EU leading exporter of poultry. It also increased the export of grains and products of their processing by 40%. In the first quarter of 2023, Poland sold 10,500 tonnes of poultry to Ukraine, which is 2.5 times more than Ukrainian deliveries, Solsky said.

European traders, carriers and ports also earned from Ukrainian grain, he said.

Solsky supported the idea of progressive compensation for grain transportation to Europe, which would help countries farther from the Ukrainian border to procure grain at normal prices. At the same time, farmers in countries bordering Ukraine will experience lesser pressure from the prices, he said.

Speaking of prices, Solsky noted the need for their accurate comparison and proposed relying on the pre-crisis prices rather than disproportionately high prices of the first months of the crisis. He also said that a forecast of very large corn harvest in Brazil was sending market prices down.

Poland banned imports of Ukrainian agricultural products on April 15, and Hungary, Slovakia and Bulgaria acted likewise. Later on, they allowed transit but tightened its rules.

European Commissioner for Agriculture Janusz Wojciechowski said on April 25 that the European Commission and five countries - Poland, Hungary, Slovakia, Romania and Bulgaria - were close to a solution of the problem of Ukrainian agricultural exports. In his words, the European Commission proposed a temporary import ban until June 5 only for those five countries and for five most sensitive products: corn, wheat, rapeseed, sunflower seeds, and sunflower oil.

Poland and other members of the five proposed banning some other exports, such as honey, sugar, poultry, and meat and dairy products, and extending the ban until the end of this year.