EU trade shift looms: Ukraine braces for rule changes
Last year, Ukrainian agroholdings reported a fivefold increase in profits, mainly due to exports to the European Union. Meanwhile, Brussels plans to announce new trade rules with Ukraine before June 3, 2025. Ukrainians fear a return to pre-Russian invasion rules.
In the first quarter of 2024, Ukrainian agroholdings achieved profits of approximately 37 billion hryvnias, which represents a fivefold increase compared to the same period in 2023. The main market for Ukrainian agricultural products is the European Union, which accounted for 56.6% of Ukraine's agri-food exports, as reported by the industry portal latifundist.com, cited by topagrar.pl.
Ukraine increased grain exports by nearly 30%, which contributed to the growth of revenue in the Ukrainian agricultural sector. This was particularly noticeable in the case of barley, wheat, and corn.
Since 2022, Ukraine has benefited from trade preferences that allow exports to the EU without duties. However, the increasing imports of Ukrainian goods have sparked protests from farmers within the Union, leading to the European Commission's introduction of autonomous trade measures.
"The import of grain from Ukraine led to a surplus of goods on the market, which lowered the prices of key crops in the EU. Total grain imports in the EU increased from approximately 21.8 million metric tonnes in 2020 to 32.7 million metric tonnes in 2023—a 50% increase. The price of wheat in France at the end of 2023 was approximately €209 per metric tonne—compared to an average of €304 in 2020," wrote in an open letter to the European Commission President Ursula von der Leyen, the head of the "Grains" group in Copa-Cogeca, Cédric Benoist.
"Meanwhile, the average production cost was around €1414 per hectare in 2020, and in 2023 – €2065 per hectare," he added.
The future of trade with the EU
The European Commission plans to announce new trade rules with Ukraine before June 3, 2025. Ukrainians fear that a return to previous trade rules could decrease exports to the EU by $1.5 billion annually.
On June 4, the EU's rules regarding duty-free imports of agricultural products from Ukraine will expire, and new rules propose higher tariffs, according to reports from the "Financial Times" citing signals from Brussels.
Ukraine's Deputy Minister of Economy, Taras Kachka, announced that Kyiv would not accept the restrictions. In the absence of progress in negotiations, the country may introduce trade measures targeting countries blocking the talks.
