EU Seeks Routes to Keep Ukrainian Grain Flowing Amid Drought and War

EU Commissioner Christophe Hansen emphasized that the European Union plays a crucial role in global food security as a major agricultural exporter. To address the ongoing drought and war-related issues affecting Ukraine's grain exports, the EU is exploring all possible routes to keep Ukrainian grain flowing.

Hansen warned that if European harvests shrink, the ripple effects won't be limited to the EU's borders. He urged national governments to rapidly assess which current Common Agricultural Policy (CAP) flexibilities they can deploy to support farmers and maintain food supply stability.

The EU is coordinating with member states to soften the financial blow from extreme weather for farmers without introducing new rules. Options already available include applying force majeure, relaxing some funding conditions, increasing support via the emergency fertilizer plan, and paying out CAP funds earlier than scheduled.

The drought has significantly reduced farm production across the region, and attacks around the Black Sea are limiting shipments from Russia and Ukraine. As a result, wheat and corn benchmarks have pushed to multi-year highs, with Paris wheat futures reaching a two-year peak according to Euronext data.