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Despite Decreasing Export Restrictions, European Food Trade Remains a Challenge, Officials Say

The U.S. and the EU said they have made progress convincing other countries not to impose export restrictions on critical food supplies after an initial spike in the measures due to Russia’s invasion of Ukraine. But leaders are still struggling to help Ukraine export its food supplies to the rest of the world, officials said, and they don’t expect that issue to be resolved anytime soon.

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Cary Fowler, a food security official with the State Department, said the U.S. has been busy meeting with countries to explain to them “why we shouldn't be having export restrictions on these kinds of vital materials,” especially grain and fertilizer. “I think that's actually paying some dividends,” Fowler said during a June 22 event hosted by the Atlantic Council. “We've seen restrictions come off, and in some cases, I think we can declare victory by not seeing other restrictions go on.”

After Russia in February invaded Ukraine, a country responsible for 10% of the global wheat trade (see 2204080037), at least 20 countries introduced some type of food export restriction out of fear of running out of domestic supplies, Fowler said. But many of those restrictions have since been eliminated, said Michael Scannell, a European Commission official.

“I think the message is well understood,” Scannell said. “We know from the experience of previous crises in commodity markets that restrictions on trade have made bad situations worse.” Scannell said more companies are straying away from the restrictions, pointing to the World Trade Organization ministerial last week, which ended with an agreement to allow sales of commodities to the World Food Program even if the product is subject to export restrictions (see 2206170010).

“There have been a few instances where individual countries have put in place restrictions but, frankly, I think that the message is clear,” he said. “Everybody is conscious of the fact that basically the common interest is served by allowing trade to continue to flow.”

But eliminating food export restrictions won’t be enough to solve a global food crisis worsened by Russia’s invasion of Ukraine, the two officials said. The EU is still working to find alternatives to Ukraine’s Black Sea ports in order to move grain and other staple food crops, Scannell said, and hopes it may find a solution in Romania’s Black Sea ports.

The EU is working with Romania to double the number of ships that can use its channel, he said. “That would, frankly, hugely increase the capacity to move those grains,” Scannell said. “It will be another issue again in speeding up the loading of grains at the port itself, but again, that's an issue we're working on.”

The EU is also examining whether it can use other ports throughout Europe, including Germany’s North Sea ports, Scannell said. But that involves securing safe and reliable truck and rail transport from Ukraine, he said. That has proven challenging, Fowler said, particularly because much of Ukraine’s transportation infrastructure is designed to deliver food exports toward Odessa along the Black Sea.

“We can't hide -- it's a huge challenge. You simply cannot overnight replace Ukrainian Black Sea ports,” Scannell said. “These were geared up and equipped to move huge volumes of grain, and finding alternatives in the short term is very, very challenging. But that's the task we're setting ourselves.”