On Wednesday, 27 March, talks were held between representatives of the Ministry of Agriculture of Poland and Ukraine in Warsaw.
Unfortunately, the ministry has not yet provided any authoritative comments, but we have managed to get to know the atmosphere of the gathering and the findings that have been reached.
Currently, the main subject of discussion in the media space is the behaviour of Deputy Minister of Agriculture Michał Kołodziejczak during the meeting. Nevertheless, we request to stay calm and look at the specifics that can be a spark of hope.
Our whistleblowers, who participate in the negotiations, study that the gathering was held in a friendly atmosphere and the pursuit of an agreement was clearly felt.
According to them, there are respective reasons for cautious optimism.
Lega artis AppThere are reasons for cautious optimism
The first origin is the simplification in the profitability of agricultural production in Ukraine. According to the information provided by the Ukrainian side, the production of cereals on the east border is presently becoming little profitable. The consequence is simply a failure rate of about 20% for each tonne of cereals.
This is good news, says our informant. “It means that Ukraine besides has limits and will no longer be able to produce cheaply. If their costs increase, our competitiveness will besides increase," he adds.
The second aspect of the cost-effectiveness of production in Ukraine is that exporting cereals through the Black Sea from Ukraine is financially more profitable than transit through Poland. Ukrainians are based on existing contracts which require the export by Poland of around 450 1000 tonnes of cereals, of which about 220 1000 tonnes are planned in April and May.
The Ukrainian side besides reports that in the erstwhile period they managed to export 7.4 million tonnes of cereals through ports on the Black Sea. This suggests that the capacity of Ukrainian ports to tranship is much higher than previously expected, as export opportunities of 4 million tonnes per period have been mentioned so far.
This is simply a good sign, due to the fact that given the increased cost-effectiveness of trade utilizing routes across the Black Sea in combination with the large handling capacity, most Ukrainian exports will be diverted to the Orsk road and halt flooding Europe – concludes our informant. “Adding to this, the fact that in Ukraine this year the amount of grain production will importantly decrease – to about 50 million tonnes we can be cautious optimists.
Ukraine declares suspension of transit from 5 June
The most crucial point, which was presented during the meeting, was Ukraine's message that after the expiry of the current export contracts for cereals by Poland, which take place until 5 June, Ukraine will halt utilizing this way as an export direction. Consequently, both exports to Poland and transit will be stopped completely.
Ukraine declares that after 5 June both export and transit will take place, and all their trade will be moved back to the Black Sea – 1 of our interlocutors informs. “Now our goal should be to get these assurances in writing and their hard execution,” he adds.
From the unofficial sources to which I am calling the ‘Farmer’ port, it is clear that Ukraine's message remains in the midst of large uncertainty and may be any kind of ambush. It is so crucial to guarantee that these findings are written down.
The proposal sounded a bit in speech that if Poland agreed to complete the old contracts and allowed transit until June, then they would suspend export by our channel. However, I am a small afraid that Ukraine is trying to apply the runway to us, hoping that Poland will not agree to transit for the next 2 months, and thus release Ukraine from the declaration of suspension of transit since June," our informant says. We should be very careful here.
The portal cites its informant, believes that the next 2 months will let Ukraine to release its grain market.
Let us remind that the main request of the protesters is just to close the border with Ukraine from where the method mess called agri-food productions is coming to Poland. Many conversations suggested that the border should be closed for 2 to 3 months, until our grain hill was unloaded.
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