Commodity news

EU extends suspension of duties on imports from Ukraine to 2025

The deal is expected to renew the suspension of import duties and quotas on Ukrainian exports to the EU until June 5, 2025.

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April 18, 2024

EU member states’ representatives confirmed the provisional deal to renew the suspension of import duties and quotas on Ukrainian exports to the EU until June 5, 2025.

At the same time, the EU has decided to reinforce the protection of sensitive agricultural products by beefing up safeguards already included in the currently applicable autonomous trade measures, which includes taking into account any adverse impact on the market of one or several member states, rather than just on the EU market as a whole (as is the case now). A new automatic safeguard will also be added for certain sensitive products, such as poultry, eggs, sugar, oats, maize, groats and honey.

The autonomous trade measures (ATMs) will allow Ukraine to continue generating its own income from trade flows with the EU, which is important to support its economy. Coupled with the EU’s extensive military, financial and humanitarian support, this will help Ukraine with its long-term recovery as well as its gradual integration into the EU internal market.

Decreased grain area in Ukraine

Overall Ukrainian grain production and exports are expected to fall in marketing year (MY) 2024/25, reported the Foreign Agricultural Service of the US Department of Agriculture. FAS Kyiv forecasts a 3% decrease in total grain (wheat, barley, corn, and rye) production area for MY2024/25 as grains have had lower profitability compared to oilseeds. The total MY2024/25 grain production volume is forecast 6% down based on a combination of smaller areas and lower yields. Although yields are still expected to be above the five-year average due to positive conditions so far, they are unlikely to reach the near-record yields of MY2023/24. Grain exports are also expected to ease in MY2024/25 due to the smaller expected crops.

Border blockages and export limitations imposed by neighboring EU countries did not have a significant effect on total MY2023/24 grain exports (except for rye). In addition, Ukraine managed to resume operations of its Black Sea ports. The EU is the major market for Ukrainian grain exports due to the temporary suspension of import duties and quotas.

Domestic consumption (both food and feed) is gradually recovering as both population and industry are adjusting to post-invasion realities since the beginning of MY2022/23. Restored trade logistics and lower production volumes suggest minimal ending stocks for both MY2023/24 and MY2024/25.