Working on mistakes: who and how can and should unblock soybean and rapeseed exports
18 September 2025 16:43
The initiators of the 10% export duty on soybeans and rapeseed were resourceful and persistent enough to push this decision through parliament under the guise of a non-core law, but they did not have the time or the will to write out the mechanism for exempting farmers who export their own produce. What did this lead to and what to do about it – found out
“Exports stopped, losses for farmers, profits for processors” – that’s how you can describe the situation in a few words. But we can also not mince words and quote, for example, the appeal of the Ukrainian Agribusiness Club (UCAB) calling on the Cabinet of Ministers and the Verkhovna Rada to repeal the law that imposes a 10% duty on exports of soybeans and rapeseed as soon as possible.
“Due to the lack of clear rules for documenting the origin of goods, the mechanism is not actually working, and exports of oilseeds have been blocked. According to market participants, vessels with grain are idle in ports, and shipments are delayed. Many batches are formed from grain from both direct producers and traders, which makes it impossible to process documents even if they are ready to pay the duty. This leads to additional logistics costs, fines and demurrage, which affects agricultural producers and undermines the trust of foreign partners, reducing the competitiveness of Ukrainian products,” the statement says.
UCAB emphasizes that postponing the solution to the problem only exacerbates the negative consequences. Despite the fact that the Cabinet of Ministers has been given three months to approve the bylaws, businesses are already suffering significant losses, and the fulfillment of export contracts is at risk of disruption.
Who is the loser and who is the winner Edition
“The losses are already significant, even if we take into account the volumes that are in the ports. The minimum amount of rapeseed in the port terminals is 300-350 thousand tons – I emphasize that this is the minimum, and about 100 thousand tons are heading to the port, meaning that we have about 400-450 thousand tons for shipment. The average transaction prices were about 530-560 per tonne DAP port, and we need to deduct 10% of the duty. It turns out to be $50 (duty) for 400-450 thousand tons of rapeseed to be exported. That is, we already have $20-23 mln. The farmer will pay this money out of his own pocket,” the expert states.
As for soybeans, he said, the season is just beginning: in September, 100-150 thousand tons were supposed to be exported, but it turned out that only about 40-50 thousand tons were exported and stopped. According to Mr. Buyukli, the losses for this crop will be even higher.
“First, we grew more of it. Secondly, while we managed to export part of the rapeseed without duties, the soybean season is just beginning and all 3-3.5 million tons that were planned for export are subject to duties. As of now, we can talk about $16-20 mln to be paid in duties. However, it is only the beginning of the season, so the losses may be higher than for rapeseed,” explains the expert.
If farmers are already counting losses, there are those who can count on profits. Oleksandr Buyukli continues.
“The prices of processors have plummeted against the background of blocking exports. Before these problems, a ton of rapeseed was bought at 24000 UAH/t CPT factory. Now the price has dropped to 22500-23000 UAH/t CPT plant. Similarly, soybeans were at 18000-18400 UAH/t CPT plant before the problems. Now the price of the processor is 16500-17000 UAH/t. The longer it takes to solve the problems, the greater the damage will be,” the expert says.
A bigger loss for some often means a profit for others. The obvious beneficiaries in the situation of export suspension are processing companies.
Bohdan Kostetskyi, operating partner of Barva Invest, agrees.
“Obviously, the 10 plants that are currently processing rapeseed are definitely seeing an increase in their sales liquidity. Their price has suddenly become more attractive compared to the export option,” says Mr. Kostetskyi.
According to him, the processors are now “licking their wounds” as they have built excessive processing capacities without thinking and now find themselves in a situation where they have 22-23 million tons of processing capacity and not enough raw materials. Bohdan Kostetskyi continues.
“But even if we imagine that prohibitive duties on all oilseeds will be introduced, we will still be in a shortage of raw materials by at least 4-5 million tons. And in a regime where producers are allowed to export duty-free, the deficit will still remain at 8-9 million tons. So, all these are attempts to solve the problems of processors at the expense of the agricultural producer,” the expert concludes.
Stopping the export of rapeseed and soybeans means not only financial losses for producers and exporters, but also a damaged international reputation and a real prospect of losing foreign markets.
Oleksandr Buyukli, Executive Director of the First Ukrainian Agricultural Cooperative, continues.
“The breach of contracts leads to a loss of reputation in the eyes of foreign partners. Traders had contracts for the supply of both soybeans and rapeseed. And now traders are forced to renounce their obligations, which often entails fines for non-fulfillment of contracts. This means that our reputation, which we have been building over the years, is suffering. Because of the disruption of supplies, we will already be treated with distrust. And while we have no one to replace us in rapeseed, we are being replaced by American soybeans in the markets of Egypt and Turkey,” the expert says.
According to him, the United States will have a lot of beans this year, and amid the US problems with China, the world’s largest soybean importer, the Americans will look for other markets and, in particular, actively enter Egypt, Turkey, and the EU. Accordingly, it will be difficult for Ukraine to regain its position in these markets.
How to unblock exports
There is a simple answer to the question “What to do”: develop a procedure for documenting the origin of products grown by agricultural producers or cooperatives. But it’s easy to say, but hard to do.
The initiators of the 10% export duty on soybeans and rapeseed, who have been promoting their idea in parliament for months, have not done so.
The Cabinet of Ministers, which has been given three months to approve the bylaws, has not been in a hurry either. Supporters of conspiracy theories may even suggest that the lack of a mechanism for determining the actual production is a programmed step to push producers to turn to processors. Moreover, as we know, the expediency of introducing export duties was explained by the need to increase the volume of soybean and rapeseed processing in Ukraine.
Bohdan Kostetskyi, operating partner of Barva Invest, continues.
“I am not a supporter of any cartel conspiracy theories, but if I try to imagine myself as a manager of one of the large backbone plants, even if I did not plan it, I would strongly support the slowest possible steps towards resolving this situation. And we already hear that at ministerial meetings they say that we need legislative assistance. This means that this process will now go through the committees and get into the queue of draft laws. These amendments need to be prepared, and the mechanism of action for customs to collect export duties needs to be outlined. In other words, we need lawmaking. And we are already hearing forecasts that additional amendments may be considered at the end of October,” the expert states.
According to him, there is a danger of delaying the process by introducing various additional amendments, as there are enough stakeholders and lobbyists in this process. However, there are not enough people ready to take responsibility for decision-making.
“There have been a lot of different meetings in recent weeks, but no one wants to take responsibility: neither the Ministry of Economy, which has “swallowed” Ministry of Agrarian Policy, nor the Ministry of Finance. I think that a bylaw authored by the Cabinet of Ministers could resolve this issue, but again, I have a question: how much of a priority and how timely is this for them now,” says Kostetskyi.
He also believes that when developing a procedure for documenting the origin of products, it is worth using the capabilities of the State Agrarian Register (SAR).
“There, the producer has to declare that I have such and such an area, such was the yield. This is all verified by checking the land use documents – ownership, lease. The yields are also clear for the region – average. And this is how the SAR system works. And many producers have their offices there because they are used to receive certain state aid. But the problem is that the law does not provide any tools at all. Because these amendments on customs duties were written carelessly, very quickly, as a trailer to a completely different law. I don’t blame customs at all, they just need clear instructions, they need a reliable tool,” summarizes Kostetskyi.
Well, the lawmakers gave the Cabinet of Ministers three months to harmonize the regulations with the law that introduced the export duty on soybeans and rapeseed. This means that the government still has time. Unlike farmers and exporters. That is why the Ukrainian Agribusiness Club proposes a simpler solution – the immediate repeal of the law that has made life and work so difficult for agricultural producers.
Author: Sergiy Vasilevich
