Germany's fear of Ukrainian grain

2023-08-10 15:51:00, Kosova & Bota CNA

Ukrainian grains hurt German farmers?

In Germany, there are rumors that wheat in Ukraine is sold at 70 euros per ton and that at this price it can also reach the German market.

If this indeed happens, this would be bad news for German wheat producers. Because the price on the stock market is currently around 235 euros per ton. Cheap wheat imported from Ukraine could destroy the German market and thus would also destroy the farmers in this country. This is the theory. But what is the reality?

There are no concrete figures - only guesses

The fact is that many German farmers are worried, but when asked specifically why, there is no concrete answer. Many have heard that someone knows someone who has been told by someone that cheap grain from Ukraine has been entering the German market for months. There is a fear that traders and millers will buy cheap goods - no matter how good they are - and that the German farmer will be left with his quality wheat unsold.

Russia has also attacked the grain barns, Odesa

But how much grain has really arrived from Ukraine in Germany in recent years and how much is coming now? A spokeswoman for the German Ministry of Agriculture says: " We don't know, we don't have exact figures. Grain comes to Germany from Ukraine, but we don't know how much, we don't do statistics. " When wheat from Ukraine arrives in Poland, it is inside the market common European. It does not indicate where the goods go, through which roads it goes and where it stops.

There is no grain from Ukraine to German mills

The Association of German Mills gives clarifications. Eight million tons of wheat are processed annually in German mills, grain from Ukraine is insignificant, explains director Peter Haarbeck. "So far, 50,000 tons of Ukrainian grains have been imported. They do not end up in mills, but are further traded or end up as livestock feed."

However, due to the current political situation, it is possible that a little more wheat will come from Ukraine in the future. However, these are small amounts that cannot shake the market or affect grain prices, Haarbeck said. So why are German farmers afraid?

Export through the solidarity corridor instead of the Black Sea

Since the start of the war in Ukraine in February 2022, the usual trade routes for the export of grain from Ukraine through ports on the Black Sea have been blocked. The grains that people in Africa need cannot be exported.

European farmers fear low prices

Now the so-called "Roads of Solidarity", the land corridors of solidarity, have been created. Since then, grain has come from Ukraine to the EU by train, truck or riverboat - without customs duties and without much red tape. The main target is African countries. After Russian President Vladimir Putin canceled the agreement on the export of grain through the Black Sea, these "roads of solidarity" must now be expanded.

Protests of European farmers

But not everyone is happy with this idea. In February, Polish farmers took to barricades and blocked border points with Ukraine. Because wheat from Ukraine, which was actually supposed to arrive at the port of Gda?sk in the Baltic, did not arrive there, but remained in Poland, causing an oversupply in this country. Prices fell and Polish farmers could no longer sell their grain.

Farmers in Slovakia, Hungary, Romania and Bulgaria also protested. Because of this, the EU took a decision to help them financially from the EU budget and safeguards were put in place. Grain imported duty-free from Ukraine cannot stay in these countries until September 15, 2023.

But as soon as these protective measures were put in place, criticism was heard in Germany. German farmers fear that Ukrainian wheat from Poland will now end up in Germany. Federal Minister of Agriculture Cem Özdemir stressed that wheat should end up in Africa and that the problem should not be transferred to Germany. In late July at the Agriculture Council in Brussels, he criticized the fact that Poland, Slovakia, Hungary, Romania and Bulgaria were taking measures on their own, without agreement with others in the EU.

" This affects everyone in the EU, Europe must show solidarity and protection measures for Poland and other neighboring countries of Ukraine must not be extended beyond September 15 ," Özdemir's spokeswoman said. When asked who was specifically harmed by Poland's behavior and whether Özdemir is right with his request to protect German farmers, the spokeswoman did not answer.

Are the rumors based on Russian propaganda?

Let's go back to the rumors that Ukrainian wheat is being sold for 70 euros. A well-connected Bavarian farmer in Ukraine says bread wheat currently sells for around 130 euros per tonne. He believes that rumors about the introduction of Ukrainian wheat into these countries are part of Putin's propaganda and strategy to create anti-Ukrainian feelings in the West.

Putin and his strategy of spreading panic

This is also confirmed by Dietrich Treis, who lives and works in Ukraine since 1990 and runs a farm of 4,500 hectares, 70 kilometers east of Kiev. Treis believes that Russia is involved in this matter. He says that transport from his farm near Kiev to Germany costs at least 150 euros per ton, those closer to the border can probably achieve a price of 100 euros. " Wholesalers themselves pay around 95 euros for the wheat they get from the farm. So why would someone in Germany sell this wheat for 70 euros? Economically, it doesn't make sense."

Creating panic

Munich-based agricultural trading firm BayWa reports that the market for agricultural products such as bread wheat is very transparent, as the price is based on the stock market - and the daily rate was €238 per tonne in the middle of last week. Spokeswoman Antje Krieger says: "These rumors have little to do with the truth."

The Bavarian Farmers' Association (BBV) does not believe that much lower prices below world market levels are a realistic scenario either. But according to the spokesman Markus Drexler, "the fact is that farmers are asking where the Ukrainian grain will go" . So far, there are no major changes in the market. " In conversations with traders last week, it was not possible to determine any increase in the offer of brokers from this region (Ukraine)" , say the association. They have requested in July that Ukrainian wheat destined for other regions of the world not put into circulation in the internal market of the EU./ DW