EU quotas after June 6: in-depth analysis of the consequences for Ukrainian agricultural exports
30 May 2025 14:02
ANALYSIS
on June 6, 2024, the simplified trade regime between Ukraine and the European Union will expire, which means a return to the previous regime – the Deep and Comprehensive Free Trade Area between Ukraine and the EU. The only problem is that this “deep and comprehensive” zone provides for much worse conditions for Ukrainian exports than they have had over the past three years. In general, we are talking about a rather strict regime of free trade quotas for almost every export item. Leading industry experts have assessed the consequences of these changes and outlined possible ways of developing the situation for "Komersant Ukrainian".
Scale of losses: billions of euros at risk
Denys Marchuk, agro-expert and deputy head of the All-Ukrainian Agrarian Council, assesses the current situation rather cautiously. He reminds us that Ukraine is only returning to the previous trade regime with the EU, which was in place before the full-scale Russian invasion. At the same time, the expert emphasizes the dramatic changes that have taken place over the three years of war.
“Over these three years, of course, export opportunities have increased. We can see it even by the numbers: by 2022, we had 30% of total agricultural exports to the EU, and now it is 50%. We have increased our foreign exchange earnings to 13 billion euros,”
– the expert comments.
Therefore, the financial consequences of returning to quotas will be very significant. Marchuk explains:
“The Tax Committee gives a figure of minus 3-3.5 billion euros in the annual balance sheet due to the lack of access to markets for certain products.”
This estimate is confirmed by economist Oleg Pendzin:
“Does $3 billion a year pose a threat to Ukrainian agricultural exports or not? It does. The total volume of quotas is at the level of 7/12 of annual volumes. This is what is coming back.”
The most vulnerable sectors: added value under attack
Denys Marchuk analyzes in detail which sectors will suffer the most:
“Raw materials will go to other areas. Value-added will suffer to a greater extent: dairy, meat products, chicken, because they were really quite present [on the European market – ed. They will be there, they will just be limited.”
Petro Yurchyshyn, a member of the Verkhovna Rada Committee on Agrarian and Land Policy, specifies other problematic categories:
“Of course, there is the issue of beef, pork, and most importantly, corn, i.e., industrial crops. Now there is an overproduction of chicken, but there is a different course. They have moved production to Europe, so they will not lose anything from this.”
European protectionism does not apply to future members
Oleg Pendzin does not hide his disappointment with European politics:
“We were finally thrown out of the European premium agricultural market. And despite all the statements that someone will actively revise something there, I have very serious doubts about this. Because Europeans are very protective of their agrarian socialism, and they will continue to do so.”
The economist explains the geopolitical logic of European decisions, which is maximally rational:
“Moreover, negotiations with the United States on trade duties are coming up. And the main products that Americans want to supply to the European market are agricultural products. These are beef and grain. That is, if they allow the American market to enter, they will not allow the Ukrainian market to enter, without any restrictions at all.”
Leonid Kozachenko, president of the Ukrainian Agrarian Confederation, emphasizes the systemic nature of the problem, but also hints at the geopolitical dimension and the EU’s banal choice not to favor a country that is about to become a member of the Union.
“Their farmers, you know, mostly from four European countries, are blocking our products. Grain, oilseeds, and processed products. At the same time, they did not block the same products from Belarus, Russia, or, say, Brazil, Argentina, etc.”
– says the farmer.
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Forced diversification: lessons from the sugar market
Denys Marchuk gives an illustrative example of successful adaptation to European restrictions by Ukrainian sugar producers:
“Conventionally, in 2023, they sold about 500 thousand tons there. Then they were subjected to emergency braking, and today they supply only 10% of their exports to the EU. But still, in this marketing year, they have already sold more than 450 thousand tons to other continents.”
The expert recognizes the painfulness of the process, but emphasizes its necessity: we need to look for new markets.
The Polish factor and the electoral situation
Petro Yurchyshyn links the current situation to internal political processes in the EU. In particular, he believes that the situation will somewhat normalize after the presidential election in Poland. He also draws a historical parallel with Poland:
“When Poland joined the EU, everything was blocked there. Who wants to have a competitor?”
When asked about the possibility of revising the quotas, he is cautiously optimistic:
“No one can say anything now. Yes, there will be a quota, but it is important that we work the way we have been working for the last five years. That would be great.”
Prospects for the negotiation process
Denys Marchuk does not rule out the possibility of improving the situation in the future. “The negotiation process will definitely continue, because the free trade area provides for a comprehensive area of cooperation and trade. Lists of goods are constantly being agreed upon, so there should be some progress in this process.
“I think if it fails in the summer, we might see some more positive things in the fall than what we have today.”
Historical context and positive aspects
Oleg Pendzin tries to put the situation in a historical perspective to find the positive in it:
“It’s much better than it was in ’22. This is a return, in fact, to the year 21. But it is not as critical as it was in ’22. For example, the Black Sea is working, the grain corridor is working without any problems.”
Summary
Summarizing expert estimates, the end of the trade preferences regime with the EU poses a serious challenge for the Ukrainian agricultural sector. Losses are estimated to reach EUR 3-3.5 billion per year, which will be particularly painful for producers of value-added products.
At the same time, experts remain hopeful that the situation will improve through the negotiation process and point to the need for active diversification of export markets. The latter has quite normal conditions, as Ukraine is able to ship products by sea, which was not the case in 2022.
The final decision to be made in the coming days will determine the future of the Ukrainian agricultural sector in the European market. However, it seems that there is a 99% chance that it will be a return to the trade regime with the EU that was in place before the full-scale Russian invasion.
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