Kyiv says it may seek arbitration over grain export restrictions as Poland stands firm

FILE PHOTO: A grain ship carrying Ukrainian grain is seen in the Black Sea near Ukrainian port of Odesa

KYIV (Reuters) - Kyiv warned on Tuesday it could seek international arbitration over restrictions on its grain exports after Poland said it would continue to block domestic imports of Ukrainian grain even if Brussels lifts a ban.

Restrictions imposed by the European Union in May allowed Poland, Bulgaria, Hungary, Romania and Slovakia to ban domestic sales of Ukrainian wheat, maize, rapeseed and sunflower seeds, while permitting transit of such cargoes for export elsewhere.

The restrictions, designed to ease excess supply, are due to expire on Friday. Poland, which holds a parliamentary election on Oct. 15 and says cheaper Ukrainian grain makes domestic production unprofitable, has said it will not lift its ban even if the EU does not extend the arrangement this week.

"We have no intention of harming Polish farmers. We greatly appreciate the support of the Polish people and Polish families!" Ukrainian Prime Minister Denys Shmyhal said on social media platform X.

"But in the case of a violation of trade law in the interests of political populism before elections, Ukraine will be forced to turn to WTO (World Trade Organization) arbitration," he added.

Shmyhal's comments are the latest by Kyiv calling for an end to the restrictions as Russia wages war on Ukraine, and for the unimpeded export of all Ukrainian agriculture products to the EU.

The five central European countries want the EU ban extended at least until the end of the year. Poland's government is under pressure from domestic farmers to stand firm as next month's election approaches.

"We will not open the borders to Ukrainian grain! Embargo stays," Prime Minister Mateusz Morawiecki said on X.

The Polish government said: "In the event that the European Commission does not extend the ban on grain imports from Ukraine beyond 15 September, Poland will introduce such a ban on a domestic level."

Maintaining grain exports is important for Ukraine, especially since Russia quit a deal in July that had enabled Kyiv to ship grain safely via the Black Sea.

Ukraine will overall be able to export around 50 million metric tons of agricultural goods in the 2023/24 July-June season, the government has said.

Before the war, eastern European countries were not among the main importers of Ukrainian grain, but the export of Ukrainian grains and oilseeds to Poland and Romania rose sharply last year, Ukrainian customs data showed.

(Reporting by Anna Pruchnicka, Additional reporting by Pavel Polityuk in Kyiv and by Warsaw newsroom, Editing by Timothy heritage)