“Agrobarometer: how farmers will trade with the EU after June 5 and where they will look for new markets
5 June 16:30
ANALYSIS FROM 
For Ukrainian exporters, “nothing will change” in terms of access to the EU market after the expiration of autonomous trade routes on June 5. This is the opinion of government officials, who assume that an updated model of trade with the EU will be presented in June. Ukrainian agrarians are less optimistic about the timing of the renewal of trade relations and the consequences of the abolition of preferences.
What should the Ukrainian agricultural community expect and whether it is already worth looking for new markets for agricultural products – "Komersant Ukrainian" found out.
Government optimism has an explanation
Prime Minister Denys Shmyhal argues that “there are no grounds for deterioration of trade conditions in the short term” by saying that there is a preliminary agreement with the European Commission that the Free Trade Area in the amount of 7/12 quotas will be in effect until the amendments to the Association Agreement are adopted, which will determine the new trade conditions.
“We understand that this seven-month quota volume will be sufficient for Ukraine not to experience a deterioration in the conditions we have had over the past three years,” the Prime Minister said recently.
Accordingly, he formulated the main task: to promptly agree with the EU on amendments to the Association Agreement. And Taras Kachka, Deputy Minister of Economy and Trade Representative of Ukraine, hopes that in June Ukrainian negotiators will be able to present an updated model of trade with the EU. But is everything so optimistic?
Hope for the best – prepare for… different options
Representatives of the agricultural business expect positive news from government officials, but they are objective in their assessment of the situation.
According to Andriy Dykun, head of the All-Ukrainian Agrarian Council, no one knows how quickly the new trade rules will be agreed upon, as the EU has a bureaucracy and it is a big policy, so the decision may be made in June or September.
Of course, the European market is big, it’s close, it’s premium, but it’s being closed to us because of the protests of European farmers. It’s bad for us, it’s unpleasant for us, because we need to transport and sell it somewhere in the world, losing money because of logistics. But I would not say that it is critical for Ukraine. We have been living without this access and will continue to do so. Perhaps we will earn a little less,” the expert notes.
“But some Ukrainian producers will still have to look more critically at Europe and start looking for other markets.
Ukrainian wheat will definitely find a buyer
There is demand for Ukrainian wheat on the global market and there should be no problems with its sale. What will happen is additional logistics costs. And wheat will most likely have to be sold cheaper than it can be done in Europe.
Bohdan Kostetskyi, operating partner of Barva Invest, explains:
“Starting June 5, there will be a quota of 600 thousand tons of wheat for deliveries to Europe until the end of the calendar year. This amount is our monthly capacity. This means that Ukraine will lose the premium wheat market. Negotiations on a new trade regime are ongoing, and a decision is expected by the end of July. In the case of a negative scenario, i.e. unsuccessful negotiations for Ukraine, wheat will be sold at lower prices mainly to Asian countries: Vietnam, Indonesia, South Korea, and Taiwan. “Prices there (at the moment) are about $5-10 per ton lower than in Europe,” the expert emphasizes.
“Ukrainian corn exporters should not have any problems. As Andriy Dykun reminds, the planned quotas are not a problem here, as there is a zero duty on trade in this commodity, meaning that if the quota is selected, you can export further and pay zero duty.
Poultry and egg producers will have to maneuver
Ukrainian poultry producers would certainly like to sell their products nearby and without logistical costs. But they will have to adapt to the new conditions.
According to Sergiy Karpenko, Executive Director of the Union of Poultry Breeders of Ukraine Sergiy Karpenko, after the “trade visa-free regime” is abolished, the quota for poultry meat will be reduced by 35% by December 31, 2025, compared to the quota before June 6, and the quota for eggs and egg products will be reduced by 65%.
According to the expert, poultry exports to the EU will decrease by 27 thousand tons by the end of the year. Exports of eggs and egg products, in his opinion, will most likely continue with the payment of duties after the duty-free quota is exhausted.
This will have a negative impact on the trade balance, is expected to reduce the amount of foreign exchange earnings and worsen the financial situation of Ukrainian producers, who are already operating in critical conditions due to rising production costs, decreasing purchasing power and reduced consumption of products in the domestic market. The European market is one of the most profitable and logistically accessible. We hope for an increase in exports to other markets, as otherwise producers will be forced to cut production,” emphasizes Sergiy Karpenko.
He expects that exports will increase primarily to the markets of Central Asia, the Middle East, the Caucasus, and the UK, which has already happened after the first restrictions were introduced by the EU in 2024.
Quotas and duties are not an obstacle for Ukrainian honey
A quantitative quota is a permitted volume of imported products without paying a duty. Once it is exceeded, exports can continue subject to payment of duties. This is what Bohdan Dukhnytskyi, a leading researcher at the Department of Agrarian Market and International Integration of the National Research Center “Institute of Agrarian Economics”, reminds us.
This is the situation that has been constantly observed with honey exports, which is another “problematic” commodity in trade with the EU.
For example, according to the expert, with a quota of 5 thousand tons to 6 thousand tons, Ukraine annually exported volumes to the European Union that exceeded it several times. In addition, although the European Union remains the main market for Ukrainian honey, in 2024-2025 the United States will be the second largest buyer after Germany.
Thus, as Bohdan Dukhnytskyi emphasizes, domestic exporters have tried and will try to protect themselves from significant concentration in one geographic segment and expand the existing diversification of foreign sales to other countries with high demand.
Sugar producers should reassess their priorities
Last year, Ukrainian producers, as you know, finished with a historical record for sugar exports, having sent 746.3 thousand tons of this product to foreign markets. Moreover, 40% of exports in 2024 were directed to the EU countries. Therefore, the European market is important for Ukraine. Or was. One circumstance adds to the dramatic nature of the situation.
As Andriy Dykun, head of the All-Ukrainian Agrarian Council, explains, Ukraine began producing more sugar just after Europe opened its market.
We planted sugar beets, increased production, and Europe closed the market. That’s why it turned out ugly. Because we can easily supply a million tons to Europe. Europe is an importer in this category. It imports 3 million tons of sugar annually. We buy tractors and harvesters for sugar beet, seeds, and plant protection products from Europe. And they significantly limit our quota. I would say that this is not very good on the part of the Europeans, because they have a free trade zone with Brazil and are open to Brazilian sugar. Although Europe does not sell Brazil any combines, tractors, or anything else, but sugar is welcome. It’s just that Brazilian companies lobbied for it. It’s a shame. There was no predictability here. If the EU had told Ukrainian farmers: this is for a year or two years and that’s it. And here, in 2022-23, sugar beet was the only crop that was profitable, people started to grow it again, and here is such a “gift,” says Andrii Dykun.
But, in his opinion, the sugar industry will definitely not stop, it will continue to produce sugar and export it by sea. The expert reminds that Ukrainian sugar is a commodity that can be traded on the world market and sold, meaning that anyone can buy Ukrainian sugar and it will only be a matter of price.
What to expect in the near future
For the time being, i.e. from June 6, 2025, as Bohdan Dukhnytskyi, a leading researcher at the Institute of Agrarian Economics, reminds, there will be a transitional period within the framework of the existing free trade zone between Ukraine and the EU.
At the same time, the parties will discuss specific updated terms of trade in agri-food products for the long term. This means that the quotas that were in place in early 2022 before Russia’s full-scale invasion of Ukraine will remain in place for some time.
A significant difference will be their calculation at the level of 7/12 of the envisaged annual volume according to the number of months remaining until the end of 2025.
According to the forecast estimates of the scientists of the Institute of Agrarian Economics, a significant change in the geography of exports in the short term is quite unlikely, but a gradual expansion of sales markets outside the European Union is quite real.
Author – Sergiy Vasylevych
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