Ukraine plans to change its policy on agricultural exports to adapt to the expected end of free access to the lucrative EU market, potentially reducing raw material exports while stepping up domestic food processing, its farm minister told Reuters.
Agricultural goods accounted for about 60 per cent of Ukraine’s total exports of $41.6 billion last year, with the European Union buying around 60pc of those goods, worth about $15bn.
The EU temporarily waived duties and quotas on Ukrainian agriculture after Russia’s full-scale invasion in 2022, but that arrangement is due to expire tomorrow.
With EU farmers lobbying hard for restrictions to be placed on cheap Ukrainian competition, the free trade regime is set to be replaced by quotas, the final volume of which should be agreed between Ukraine and the EU by the end of July.
A senior Ukrainian lawmaker said last month that the end of EU preferential trade could deprive Kyiv of 3.5bn euros in annual revenue, a hole other markets will be unable to fill.
Asked how Kyiv would cope, farm minister Vitaliy Koval said in an interview: “There will definitely be changes in export policy, and they will be driven by cold calculation, as we understand that we will suffer losses if the trade regime (with the EU) changes.”
He did not specify what measures might be taken, but said domestic production was a “matter of national interest” and the government’s strategy.
Currently, Ukrainian farm exports are not taxed, but oilseed processors have already proposed that the government limit the export of oilseeds in order to increase domestic production of vegetable oil. That could boost exports of processed oils, which are more profitable than raw material oilseeds.
Koval said Ukrainian oilseed processing plants were working at only about 65pc of capacity and his ministry was “exploring all ways to utilise our Ukrainian processing plants in order to create additional value and processing products”.
Ukraine traditionally exports about half of its soybean harvest and the major part of its rapeseed harvest.
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