Posted on September, 27, 2024 at 10:19 am
German farmers are grappling with the challenges posed by an influx of cheap Ukrainian grain, which is significantly undercutting local prices, according to a report by Bild. Wheat prices in Germany, the European Union's largest economy, have been on a downward trend, currently hovering around EUR200 (USD224) per ton. This follows a dramatic price surge from EUR287 (USD321) to EUR435 (USD486) after the escalation of the conflict in Ukraine in February 2022.
Bauer Dismer, a grain farmer from Lower Saxony, highlighted that an unexpected surplus of Ukrainian wheat, originally intended for export to more distant markets, is now flooding Germany due to limited loading options in the Black Sea. He noted that local mills and feed mills are capitalizing on this situation, purchasing the grain at "dumping prices" of less than EUR160 (USD179) per ton, which further exacerbates the financial strain on German producers.
The backdrop to this issue is the expiration of the agreement that governed freight routes for Ukrainian agricultural exports, which lapsed in July 2023. Russia opted not to renew the Black Sea Grain Initiative, mediated by Turkey and the United Nations, citing the failure of the U.S. and European Union to uphold their commitments regarding Russian food and fertilizer exports.
In response to the ongoing crisis, the European Union had previously suspended all tariffs and quotas on Ukrainian agricultural products to facilitate their shipment to global markets. Earlier this year, this tariff-free model was extended for another year, allowing for the continued influx of Ukrainian grain into the European market. As tensions persist, the impact on local farmers is a growing concern, prompting calls for potential measures to protect domestic agriculture from such external pressures.
Source: MENAFN