Putin is winning his grain war, pitting Poland against Ukraine

Vladimir Putin's decision to end the deal that allowed Ukraine to export millions of tons of grain by sea is working for him. It has blown a hole in his enemy's economy and driven a wedge between close allies, all without costing Russia support in the so-called Global South.

That fact became impossible to ignore this week, after an exchange of barbs between President Volodymyr Zelenskiy and his Polish counterparts at the United Nations General Assembly in New York spun out of control. On Wednesday, Polish Prime Minister Mateusz Morawiecki said his country, one of Ukraine's largest suppliers of military aid, would send no more - a threat his government partly walked back on Thursday.

It's repugnant to see Russia weaponize food supplies in this way. It's also a fool's errand to try to persuade Putin to abandon a successful policy. This is war. Ukraine can fix the issue only with allies' help, and that will be hard to achieve even if they stick together.

The problem is that when Moscow pulled out of the Black Sea Grain Initiative in July, the West expected a sharp rise in global grain prices to follow, which would prompt the likes of India, China, Egypt and Indonesia to strong-arm Putin back into the deal. That's exactly how the original initiative came about in 2022.

But the commodity analysis in Washington and Brussels was wrong. Thanks in great measure to a bumper Russian harvest, wheat prices plunged in September to a two-year low. So the Global South has stayed conspicuously silent, and Russia is even trying to put a floor under prices to increase its revenue. Meanwhile, farming accounts for 10% of Ukraine's economy and is a key earner of hard currency; not being able to export wheat is a major blow to the country.

The Kremlin has prevented Ukraine from escaping its blockade by bombing the Danube River ports and grain silos where Kyiv had been expanding capacity. Ukraine's attempt to instead create its own grain corridor, by having ships hug the Black Sea coast to avoid attack, is valiant but meaningless. The quantities involved so far are too small.

That leaves only the overland route through Eastern Europe for Ukraine to get its vast harvests to market, yet that in the past caused local wheat prices in Poland, Hungary, Slovakia and elsewhere to plunge, hurting farm incomes. When the European Union on Friday lifted its May 2023 ban on Ukraine exports of wheat, maize, rapeseed and sunflower seed to Bulgaria, Hungary, Poland, Romania and Slovakia, three of those governments rebelled.

Brussels and Kyiv insist prices won't fall again. But even transit through Poland and its neighbors - theoretically allowed under the ban - can suppress prices because Ukrainian grain competes for export capacity, pushing more supply onto local markets.

There are three ways Ukraine and its allies can respond to Putin's grain war, and none are attractive.

First, they can wait until February-March to see how next season's crop emerges from the winter, with the hope that global grain prices rise again and Putin's window of opportunity closes. But there are no guarantees the next Russian harvest won't be as good as the last, and in the meantime Ukrainian farmers need certainty to be able to sow.

A second option is for the E.U. to shower Eastern European farmers with cash, compensating for their losses. This sets an expensive precedent. Third, the West can cave to Putin's conditions for restoring the grain deal by lifting some sanctions on Russia.

Ukraine's frustration at being cornered in this way helps explain why relations between Kyiv and Warsaw got so bad so quickly. Ukraine's farmers need to sell their harvest now, and Poland fears that allowing this will hurt its own farmers. Even so, Zelenskiy needs to step back to prevent further damage.

Poland's Law and Justice party has been one of Kyiv's staunchest supporters since the start of the war, due to the government's deep fears of Russia, but that has created an inherently unstable situation. A populist, nationalist, anti-immigrant, E.U.-skeptic government, with a near-paranoid view of its neighbors, has become the linchpin of European support for Kyiv. Poland has sent just under 20% of its own weapon stocks to help with Ukraine's defense and accepted at least 1.6 million refugees, about 1 million of whom remain in the country.

Taken together, Poland has spent more as a percentage of gross domestic product supporting Ukraine than any other nation has. That's a good investment, but now Law and Justice faces a tight race for reelection on Oct. 15 and is under attack from a party even further to the right, over the high cost of backing Kyiv. With just weeks to polling day, the government is taking no risks with its bedrock support among rural voters.

Zelenskiy should have understood both the people and political circumstances he was dealing with. Instead, Ukraine said it would sue at the World Trade Organization, and Zelenskiy called Poland out in front of the U.N. - albeit not by name - for helping to "set the stage'' for Moscow. Poland's President Andrzej Duda was even more intemperate, likening Ukraine to a drowning man who pulls down his rescuer.

Officials in Kyiv argue they're in the right: The three countries are breaking E.U. trade rules and undermining a country at war. But in Ukraine's circumstances, being right isn't the same as being wise. The risk that war fatigue sets in among Kyiv's allies is significant and a keystone of Putin's strategy for winning. It's a narrative Zelenskiy can't afford to feed.

Poland needs to reconsider, too. The war has given it a stature within Europe it has rarely had before. Countries such as Germany and France have had to acknowledge that they were wrong - and that Poland was much closer to the truth - about the danger Putin posed to continental security.

Slovakia may have shown the way on Thursday, agreeing to end its ban if Ukraine puts a licensing system in place to control flows. Poland's agriculture minister also agreed to talks to find a resolution in coming days, according to a statement on his Ukrainian counterpart's website.

Law and Justice leader Jaroslaw Kaczynski, the true power in Poland's government, acknowledged a line had been crossed. Speaking at a campaign event he described the dispute as unpleasant and unnecessary but changing nothing in Poland's support for Ukraine. Let's hope this wasn't more election-related theater, because if Warsaw is right about the Russian threat, weakening the alliance for domestic political gain would be unforgivable.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Marc Champion is a Bloomberg Opinion columnist covering Europe, Russia and the Middle East. He was previously Istanbul bureau chief for the Wall Street Journal. He was also an editor at the Financial Times, editor in chief of the Moscow Times and a correspondent for the Independent in Washington, the Balkans and Moscow.

Javier Blas is a Bloomberg Opinion columnist covering energy and commodities. A former reporter for Bloomberg News and commodities editor at the Financial Times, he is co-author of "The World for Sale: Money, Power and the Traders Who Barter the Earth's Resources."