Uncontrolled supplies of cheap grain from Ukraine are undercutting German farmers, Bild has reported, citing industry sources.
Prices for wheat in Germany, the EU’s biggest economy, are continuing to decline, the tabloid noted, adding that a ton of the commodity is currently hovering around €200 ($224). Wheat prices saw an unprecedented surge from €287 ($321) to €435 ($486) shortly after the Ukrainian conflict escalated in February 2022.
Significantly more wheat, which should be exported further afield, is currently coming to Germany due to drastically limited loading options in the Black Sea, according to Bauer Dismer, a grain farmer from Lower Saxony who was quoted by Bild.
“But our mills and feed mills take advantage instead. Apparently at dumping prices of less than €160 ($179) per ton,” he told the newspaper.
The official agreement governing the freight route for Ukrainian agricultural exports lapsed in July 2023, when Moscow declined to renew the original Türkiye- and UN-mediated Black Sea Grain Initiative. Russia said the US and EU had not kept their part of the deal, blocking exports of Russian food and fertilizer.
Shortly after the escalation of Ukrainian conflict, the EU suspended all tariffs and quotas on Ukrainian agricultural produce to enable grain from the country to be shipped onward to global markets. Earlier this year, the tariff-free trade model was extended for another year.
“We are selling off our wheat that is produced under the highest German standards, while wheat from Ukraine is being pumped into the country,” Frank Wullekopf told the newspaper, adding that Ukrainian producers are not obliged to provide proof of pesticides or fertilizer quantities.
“Not to mention the dangers posed by war-related contamination of the wheat,” the farmer added.
Meanwhile, prices for baked products in Germany are rising despite the notable decline in grain prices, according to Friedemann Berg, managing director of the German Bakers’ Confederation, as cited by the news outlet. Other costs covering personnel, energy, and bureaucracy have also increased, he said, adding that bakers in the EU have been obliged since January to certify that the production of the raw materials they use did not lead to the destruction of forests.
Farmers are not the only industry players impacted by a massive influx of cheap agricultural products from the embattled country, Bild noted, noting that producers of agricultural equipment are suffering as well, as grain growers cannot afford to bring their farming machinery up to date.