We have unofficial information from the meeting of the Ukrainian and Polish ministries of agriculture, which took place on Wednesday in Warsaw!
On Wednesday (March 27), representatives of the Polish and Ukrainian ministries of agriculture held talks in Warsaw.
For now, the ministry is silent, but we managed to find out what the atmosphere of the meeting was and what was agreed.
So far, the leading topic in the media is the behavior of the Deputy Minister of Agriculture, Michał Kołodziejczak, during the meeting. However, let’s not get crazy and take a closer look at the specifics. And these allow us to see the light at the end of the tunnel.
According to our interlocutors who took part in the negotiations, the meeting took place in a good atmosphere and the desire to reach an agreement was clearly felt.
According to their indications, there are several reasons for cautious optimism.
There are reasons for cautious optimism
The first is the decline in agricultural profitability in Ukraine. As presented by the Ukrainian side, currently grain production abroad is becoming less and less profitable. A loss of approximately 20% is recorded for each tonne.
This is good news, says our informant. – It means that Ukraine also has limits and will no longer be able to produce cheaply. If their costs increase, our competitiveness will also increase – he adds.
The second element is also related to the level of profitability of Ukrainian production. it turns out that the contracts concluded by our eastern neighbor for grain exports via the Black Sea are much more financially advantageous than those assuming transit via Poland. The reason why Ukrainians insist on transit are old contracts under which there are still 450,000 tons left to export through Poland – about 220,000 tons each in April and May.
The Ukrainian side also reported that last month they managed to export 7.4 million tons of grain through Black Sea ports. This means that the transshipment capacity of Ukrainian ports is much greater than previously reported. Let us remind you that so far it has been about 4 million tons per month.
This is a good sign, because taking into account the greater profitability of trade using the routes through the Black Sea, combined with large transshipment possibilities, most of Ukrainian exports will be directed to the Orska route and will stop flooding Europe – sums up our informant. – Adding to this the information that grain production in Ukraine will significantly decrease this year – to about 50 million tons, we can be cautiously optimistic.
Ukraine declares the suspension of transit from June 5
The most important proposal made during the meeting, however, was Ukraine’s declaration that from June 5, after the expiry of previously concluded contracts for the export of grain transit through Poland, Ukraine will stop using this route as an export destination. This means that both exports to Poland and transit will be completely stopped.
Ukraine declares that after June 5, both exports and transit will cease, and all their trade will be transferred back to the Black Sea – informs one of our interlocutors. – Now our goal should be to obtain these assurances in writing and enforce them rigorously – he adds.
Our informants unanimously claim that Ukraine’s declaration is still very illusory and may be a kind of trap, which is why it is so important to conclude these arrangements in writing.
The proposal sounded a bit like that if Poland agreed to complete the old contracts and allow transit until June, they would then suspend exports through our channel. However, I am a bit afraid that Ukraine is trying to use a subterfuge against us, it is counting on Poland not agreeing to allow transit for the next two months, and thus exempting Ukraine from the declaration to suspend transit from June – says our informant. – We have to be very careful here.
As our informant adds, the next two months will allow Ukraine to free its grain market.
All our interlocutors unanimously emphasized that the Ukrainian side came to the talks well prepared, and each of its representatives is a high-class specialist in their field.
Our ministry pales in comparison to them, they emphasize. – No wonder negotiations are difficult when such a well-prepared and determined adversary stands on the other side.
Therefore, the negotiations continue and, despite the lack of specific announcements from the ministry, they seem to be moving in the right direction. Will there be an agreement with Ukraine on the grain market? Prime Minister Donald Tusk had no doubts on this matter, although he emphasized that the talks were not easy. And will farmers be satisfied with such solutions?
Let us recall that the main demand of the protesters is to close the border. In many conversations, there were proposals to close the border for two or three months until our grain pile was unloaded. Are farmers willing to accept transit for the next few months in favor of its absence later? We encourage you to discuss!
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