Protective measures by the EU regarding Ukrainian food will lead to additional costs and losses, - UAC

This is stated in the S&P Global (Commodity Insights) material.

It is noted that the export of grain from Ukraine will fall in MY 2024/25, amid a decrease in supply and a smaller output estimate.

In addition to the predicted lower harvest and Russian shelling of Ukraine's port infrastructure, on April 23 the European Parliament approved the continuation of autonomous trade measures for Ukraine, but with safeguards. The European Commission can apply an "emergency brake" if imports of sensitive agricultural products, including corn, exceed the volume of the second half of 2021, as well as the figures of 2022 and 2023. Although wheat has not been added to the list of sensitive products, its import volumes will be closely monitored by the EC.

The EU's import restrictions will to some extent affect the export volume of Ukrainian agricultural products, in particular grain. According to Oleh Khomenko, the general director of "UCAB", with these restrictions, Ukraine will not be able to sell products in the volumes that were exported to the EU in 2022 and 2023.

"Such measures on the part of the EU will cause additional costs to agricultural producers and exporters and certain losses to our state," said Artem Havrysh, agricultural market analyst at Ukrainian Agrarian Confederation. "We believe that Ukraine may lose Eur300 million-500 million ($321 million-$535 million) as a result of these restrictions."

Havrysh added that most of the products included in the sensitive list, including corn, which can trigger "emergency brakes" will not be profitable to export with duties.

According to the UAC, the shares of wheat and corn in the total volume of grain exports by Ukraine to the EU in 2023 were 31.9% and 64.1%, respectively.

In MY 2023/24 (until February), the EU imported 8 million MT of corn and 4.37 million MT of wheat from Ukraine, EC data showed.

IC UAC according to S&P Global