EU: Russian Grain Exports in Crosshairs

Having imposed sanctions on Russian gas and oil exports, the European Union is about to hit grain exports, and this time not only from Russia, but also from neighboring Belarus. According to the British newspaper Financial Times today, “the European Union is preparing to impose prohibitive duties on wheat imports from Russia and Belarus to appease farmers in some member states. The European Commission is expected to impose a duty of €95 per ton on wheat exported from Russia and Belarus in the coming days,” the FT writes, citing its “very well-informed sources.”

This likely decision by Brussels will certainly hurt Moscow’s grain exports (as far as Italy is concerned, Russian wheat shipments went from 32,000 tons in 2022 to 400,000 tons last year) and should instead benefit Italian and European farmers. But this is only in theory and for a very long period of time.

In reality, a frontal attack on Russian wheat will not help European agriculture, but it will boost Ukraine’s exports to European markets, where farmers’ protests against Kiev’s dumping have been going on for several years. Farmers are protesting against falling prices for their products due to imports of Ukrainian cereals “exempted from compliance” with the EU’s so-called “green rules.” In Poland and some other Eastern European countries, farmers are blocking trains and pouring the Ukrainian wheat they are carrying onto the ground.

As the Italian farmers’ association Coldiretti noted, “European agricultural frenzies have led to a decline in national agricultural production, resulting in food shortages in Italy, producing only 36% of the total wheat and 53% of the corn they need to guarantee food security.”

In addition to Russian wheat, the EU hawks are going to attack Russian exports of oilseeds and their processed products, which will be subject to 50 percent duties.

And while the outlook for European agriculture is in doubt, the only certain consequence of the Brussels strike will be an imminent rise in prices. As the Financial Times wrote, such a move would “lead to price increases of at least 50%.”