The Impact of EU Tariff Quotas on Ukrainian Agriculture

The impending withdrawal of EU wartime trade waivers poses a substantial threat to Ukrainian agricultural exports, particularly negatively affecting poultry farmers.

Economic Implications

As per Ukraine’s finance ministry, the preferential trade regime has contributed approximately 10% to the country’s export revenue amidst the ongoing conflict. If the reimposition of tariffs takes effect, Ukrainian farmers face potential annual losses reaching up to €3.5 billion, according to Danylo Getmantsev, Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, as stated on his Telegram channel.

Key Sectors Affected

The agricultural sector, notably poultry farms and sugar factories, is expected to bear the brunt of the EU’s decision to revert to pre-war tariff quotas on agricultural exports after June 5. Alexander Verzhikhovskiy, CEO of IMK, one of Ukraine’s prominent agricultural enterprises, emphasized that both industries heavily depend on exports to European markets.

Furthermore, MHP, Ukraine’s leading poultry processor, has also expressed concerns regarding the harsh consequences of reinstated EU tariffs.

Voices from the Industry

“The current free trade regime facilitates stable supplies of high-quality Ukrainian products,” stated Yuriy Melnik, Deputy CEO for Sustainable Development at MHP. He highlighted the integral role of poultry exports in fostering mutually advantageous agricultural trade, noting that for every €1 of exported products, Ukrainian poultry producers import approximately €1.38 in goods and equipment from the EU.

Melnik warned that withdrawing these waivers could harm long-term contracts and investment prospects within the industry.

Moving Forward: Exploring Alternative Markets

With the loss of the preferential trade regime, Ukraine’s agricultural sector needs to pivot to alternative markets. MHP is reassessing its market strategy, focusing more on North Africa, the Middle East, and China, as Verzhikhovskiy conveyed.

Last year, Ukraine exported agricultural products valued at €13.1 billion to the EU, which constituted 6.7% of the bloc’s agricultural imports. This was a significant increase from the €5.8 billion, or 4.8%, recorded in 2020. Meanwhile, the Ukrainian Union of Poultry Farmers reported a 6% increase in poultry meat exports in 2024, totaling 446,600 tonnes, with the EU accounting for 30.5% of this figure.