The European Parliament and European Commission came to a preliminary agreement to continue allowing duty free imports of Ukrainian agricultural products, but with volume caps on many of those products.
The European Parliament and European Commission came to a preliminary agreement regarding agricultural imports from Ukraine. The new agreement allows for specific total volumes of duty-free imports of eggs, groats, honey, maize, meal, oats, poultry, and sugar. These volumes will be capped at the level of the period from 2H 2021 to 2023. The EU will monitor the situation on the border and in the countries neighboring Ukraine and react when price fluctuations affect even a single country.
Why this version is acceptable
Frankfurter Algemeine Zeitung reports that a deal had been set previously, but could not gain the support required. The current deal drops the amounts allowed in duty-free by extending the reference period to 2021, when volumes were lower. The resulting drop in duty free exports is expected to lower the intake by the Ukrainian government by 300-400 million euro depending on ag produce price dynamics.
One problem that the agreement on hand does not change is the blockages of Ukrainian border crossings by farmers. Poland, Slovakia, and Hungary have all blocked agricultural product crossings to some degree, with Polish protesters taking more radical steps at times and spilling grain out of containers.
Maritime exports
Currently, grain is leaving Ukraine via Black Sea ports. Grain exports in total are down approximately 10% year-on-year at 35.4 million tons for the 2023-2024 marketing season as of April 3. Ukraine’s Ministry of Agrarian Policy and Food tallies the season’s ag exports at 14 million tons of wheat, 19.1 million tons of corn and 1.96 million tons of barley. The ministry expects to see approximately 50 million tons of grain and oil seeds exported by the end of the marketing year.
Russian attacks on shipping diminished greatly after pulling ships back from the western Black Sea in response to the Ukrainian military routinely attacking the Black Sea Fleet in Crimea. After a merchant ship was hit by a Russian missile while docked in Odesa in November 2023, war insurance, backed by multiple governments, became more cheaply available, and export rates did not suffer. Tweeting on the subject in November, U.S. Ambassador to Ukraine Bridget Brink pointed out that maritime grain exports had fallen by about 50% from pre-war levels.
