Initially, it was expected that the protests would last until March 10, but now it is predicted to extend until the end of April. “MinFin” investigated why the Polish border was halted and when it might reopen.
“It seems the situation is only getting worse. Currently, all border crossings are blocked, with over 2,500 trucks in queues. Negotiations with the Poles are not succeeding,” says Pavlo Koval, head of the Ukrainian Agrarian Confederation.
In his address to the protesters, Ukraine’s Ambassador to Poland, Vasyl Zvarych, estimated that Ukraine has already lost approximately 2 billion zlotys due to the border blockade. “If we consider the losses over the entire period of the blockades (which began last year), the losses will be much greater — we are talking about billions of dollars. The losses affect not only Ukrainian exporters but also the budget, which is missing out on taxes, as well as Polish importing companies,” added Denys Marchuk, deputy head of the All-Ukrainian Agrarian Council. Things could get even worse, as the Polish side is now even discussing a complete closure of the border. Formally, the reason is the supposedly “aggressive” export of Ukrainian agricultural products to Poland, which is “driving local farmers into losses.” However, as Pavlo Koval noted, the situation is much more complicated.
What Polish farmers really want
The blockade of the Ukrainian-Polish border began last fall. Initially, Polish carriers organized the protests. They were dissatisfied with long queues at the border, what they saw as inadequate organization of the “e-Queue” system, and, most importantly, the excessive activity of Ukrainian transporters. Since the start of the war, Ukrainian companies were given simplified access to the European transport market, and the Poles believed that they were “undermining” the market with their low tariffs.
Through bilateral negotiations, the conflict was resolved, particularly by organizing the movement of empty trucks through a separate checkpoint outside the general queue. However, the peace at the border did not last long. Along with the carriers, occasional farmers also joined the protests last year. In February this year, they organized the border blockade independently. The alleged reason was the dominance of Ukrainian exports. Interestingly, the grain issue, which Polish farmers were unhappy about due to its mass sale in Poland, was resolved back in 2023. In fact, the sale of Ukrainian grain in Poland was completely banned, allowing only transit. This ban is still in effect. But Polish farmers now have complaints about other Ukrainian products, such as sugar, poultry, and eggs. Since the start of the war, restrictions on Ukrainian agro-exports to the EU, such as quotas and duties, were lifted. Consequently, Ukrainian food started flowing massively into Europe, including Poland.
According to the Ukrainian Agrarian Export Club (UAC), the supply of Ukrainian agricultural products to Poland significantly exceeds similar Polish imports to Ukraine. For example, in January this year, Polish importers brought $20.6 million worth of products to Ukraine (mostly poultry, coffee, canned vegetables, chocolate, spirits, cheese, etc.). During the same period, Ukraine shipped $136.3 million worth of food to Poland (with the top 10 including soybean and rapeseed oil, sugar, juices, nuts, etc.).
A similar situation occurred in the second half of last year, when the grain export ban was already in place. “We sold agricultural products worth over $800 million to Poland, while the Poles sold us goods worth $138.6 million,” noted the UAC. However, considering the overall balance of Ukrainian-Polish trade, Poland still has the advantage. Last year, Ukrainian exporters delivered goods worth $4.75 billion to the neighboring country (mostly metallurgical products), while Polish exports to Ukraine amounted to over $6 billion (mainly petroleum products, fertilizers, household chemicals, although cheese and chocolate are also in the top 10). As we can see, the share of agricultural products in Ukraine’s total exports to Poland is quite insignificant. But it is our food that has caused sharp dissatisfaction — to the extent that Polish consumers are even being urged not to buy Ukrainian products.
Polish farmers demand the return of pre-war conditions for Ukrainian agro-exports, i.e., quotas. The preferential period for our goods ends on June 5. Initially, the European Commission proposed extending it, but considered the complaints of the farmers (in addition to Polish farmers, Ukrainian products are also unsatisfactory to farmers in other European countries, such as France, Germany, Hungary, etc.).
The European Commission recommends that Ukrainian sugar, poultry, and eggs be allowed under a separate list — tracking export volumes, and if they exceed the figures for 2022-2023, restrictions will be introduced. This proposal still needs to be voted on by the European Parliament, but many farmers’ associations are dissatisfied with it. Some recommend adding honey to this list, while others want the export volumes to be measured against 2021–2022 figures (which are smaller because quotas were in effect until February 2022). But the “Ukrainian question” is only part of the Polish farmers’ demands. Others pertain purely to Polish realities. For example, farmers want a postponement of the “green transition” (because it increases agricultural technology requirements and requires investment) and an increase in government subsidies.
Politicians’ appetite is growing
Pavlo Koval says that Ukrainian food has become a hostage to Polish elections. “Local elections are to be held in Poland in April. The eastern voivodeships of this country are the wealthiest, with the largest number of farmers living there. This electorate is critical to Polish politicians. Specifically, the Polish parties PiS and ‘Confederation’ are competing for it. The latter has long been suspected of ties with Russia, and it was from this faction of striking farmers that we heard very provocative calls about Putin (one of the farmers drove a tractor with a poster calling on Putin to ‘sort things out’ – ed.).
The ruling Polish authorities seem to be afraid to act decisively because the farming electorate is very critical to them. Therefore, we see massive border blockades and even forceful measures against our exports, such as spilling grain. Although all this violates European legislation, as there is a separate decision by the European Commission that no country should obstruct the free movement of goods across Europe,” noted Koval. In the summer, both Poland and the entire European Union will have elections to the European Parliament. In fact, the election campaign is already underway, which adds fuel to the fire of farmers’ protests. “It’s very difficult for us to negotiate with the Poles because while we are working through their previous demands and coming to the meeting with our proposals, it turns out that new demands have emerged meanwhile. So, political games are underway,” says Koval.
“The situation is constantly escalating, and the current dialogue is insufficient. On our part, the Ukrainian government and public organizations are ready to communicate at any level. Last year, UCA opened an office in Brussels specifically to have another tool for communicating with European-level politicians and doing everything possible for the gradual successful integration of the agro-sector into the EU,” said Oleg Khomenko, CEO of UCA.
Denys Marchuk is hopeful about the major negotiations between the Polish and Ukrainian sides with the participation of Brussels, which are to take place on March 28. “As an option, Polish farmers may indeed get eased conditions for the ‘green transition.’ Regarding Ukrainian exports, they may introduce licensing (which is already in effect in some other Eastern European countries, such as Bulgaria).
The model is as follows: if a Polish business wants to buy, say, Ukrainian rapeseed, it must apply to the Polish Ministry of Economy and our department, which will then give the go-ahead for licensed exporters. In this way, exports can be regulated and the supply chain monitored. We proposed this option back in September, but the Polish side did not agree, I believe, for political reasons, to keep the ‘Ukrainian card’ in the fight for the farming electorate,” Denys Marchuk told MinFin. Pavlo Koval added: even if the ‘fire’ at the border can be extinguished this time, the ‘Polish case’ may repeat itself, including in other EU countries.
“Already now, European farmers are aware that Ukraine is preparing to become an EU member. And they fear competition. The European agricultural model, which is subsidy-oriented, requires transformation. And we need to carefully analyze what we are bringing to Europe. Because it’s logical that local producers will not welcome us with open arms. And our schemes, tax evasion, and other loopholes that allow businesses to earn more are unacceptable to Europeans. And they will protest,” says Koval.
Impact on prices and a “Wake-up Call” for the currency market
Undoubtedly, both countries are losing out due to the border blockade. “The border blockade will be felt both in Ukraine and in Poland. Poland risks losing the Ukrainian market: according to last year’s trade data between Poland and Ukraine, Poland has a positive balance — meaning their exports exceed imports.
Additionally, logistical challenges lead to higher transportation expenses for products. Another consequence is the increased cost of production resources for our agricultural sector. Seeds, protective agents, fertilizers — all of these mostly come to Ukraine from the EU through the Polish border. Gradually, companies will reorient to bypass Poland, which will affect product prices and increase delivery times. Ukrainian value-added products in Poland and Polish products in Ukraine will become more expensive, impacting end consumers,” forecasts Khomenko.
Ivan Pavlik, Commercial Director of Comfy, says that some equipment suppliers already have a plan “B” in case the border blockade continues. “They are working on routes or already delivering goods through Slovakia, Hungary, Romania, or using sea routes via Turkey,” he noted, adding that there is currently no shortage of equipment because sellers stocked up in advance, preparing for peak demand during the spring holidays. “Therefore, we do not expect a deterioration in the availability of goods over the next few weeks,” Pavlik assured.
Pavlo Lynnyk, CEO of Global Ocean Link, reported that carriers currently wait 25 to 20 days at the Polish border, 7–9 days at the Slovak and Hungarian borders, and 4–5 days at the Romanian border. “Therefore, we offer our clients’ delivery through Romania. This makes logistics more expensive (an additional 200–400 euros per rate) but saves time,” he says. Overall, compared to the pre-blockade times, transportation rates have increased by 2-2.5 times. In due time, all consumers will see these additional costs reflected in product prices. There could also be an impact on the currency market.
The blockade of the border by Polish protesters is already indirectly affecting the behavior and statistics of the currency market. It also impacts budget revenues from customs duties and taxes, which are not collected due to the lack of goods imported into Ukraine. Since January 1 of this year, the daily volume of interbank currency trading recorded by the Bloomberg system ranged from $82.8 million to a maximum of $230 million. Currently, these volumes often fall short of $200 million per day.
On the one hand, this situation “makes life easier” for the National Bank, which, under such market conditions, needs to conduct less extensive dollar sales interventions to control the interbank and, effectively, official exchange rates, thus saving foreign exchange reserves. This is partly slowed down by the growth rate of Ukraine’s negative trade balance, as imports are “stuck.”
However, on the other hand, the lack of fully functioning cargo and goods flow through the Polish border during wartime reduces the economic activity of Ukrainian companies, both exporters and importers. This affects budget revenues, Ukraine’s GDP, labor market statistics, and more.
