KYIV (Reuters) -Polish farmers called off their protest at the last border crossing with Ukraine on Monday, lifting a blockade that has dragged on for months, soured bilateral relations and buffeted Ukraine's trade.

Polish truckers, later joined by farmers, have blocked border crossings with Ukraine since late autumn last year amid concerns over unfair competition and cheap grain.

They have cited government inaction over a loss of business to foreign competitors since Russia's war on Ukraine, with truckers from Ukraine exempt from seeking permits to cross the Polish border.

Ukraine's border guard spokesman said Polish farmers had ended the blockade at the Rava-Ruska crossing on Monday morning.

"Fortunately, we have all directions on the border with Poland unblocked," said Andriy Demchenko, the border official, adding that trucks were crossing in both directions.

Polish border guard spokesman Andrzej Juzwiak told Reuters that all the crossings were working "without hindrance".

The Polish farm ministry said late on Sunday that farmers had announced a suspension following talks with Agriculture Minister Czeslaw Siekierski.

Ukrainian Agriculture Minister Mykola Solsky hailed "constructive work" by Poland, saying negotiations with Warsaw and industry associations had not been easy but that "the main thing is that we have a result".

WARSAW PROTEST TO GO AHEAD

It was not clear if the suspension would hold.

Ukrainian Ambassador to Poland Vasyl Zvarych said he believed the blockades were "a thing of the past".

But Polish news agency PAP cited Roman Kondrow, the leader of Podkarpacka Oszukana Wies, a local farmers' organisation in the region bordering Ukraine, as saying that protests could be resumed if necessary.

Adrian Wawrzyniak, a spokesperson for the Solidarity farmers' union, told Reuters the farmers were continuing talks with the government and still planned a protest in Warsaw on May 10.

Trucks from Ukraine transporting grain products, the central issue that has angered Polish protesters, will still face some restrictions, the Ukrainian Border Service said.

"At the same time, trucks transporting grain crops will not be allowed to enter Poland. This type of cargo can only travel through Poland in transit mode," the service said.

In an attempt to address the protesters' demands, Poland decided earlier this month to pay 2.1 billion zlotys ($520.45 million) in subsidies to farmers to compensate them for low grain prices.

The protests drew sharp criticism from Ukrainian decision makers as the tensions on the border escalated in the winter.

Warsaw and Kyiv have been engaged in talks at different levels to try to find a solution, with Ukraine calling upon the European Union to intervene. Kyiv said its agricultural exports through eastern Europe have not damaged EU markets.

In March, Ukraine and Poland hailed progress on agricultural import talks but the deal remained elusive as the countries tried to close the gap between their positions on economic and security interests.

($1 = 4.0350 zlotys)

(Reporting by Anastasiia Malenko, Yuliia Dysa, Anna Wlodarczak-Semczuk; Editing by Tom Balmforth, Bernadette Baum and Sharon Singleton)

By Yuliia Dysa and Anastasiia Malenko