April 10, 2014

 

EU set for duty-free imports of grains from Ukraine
 

 

The EU moved closer towards the launch of duty-free imports of Ukrainian grains, with duty-free quotas open until October 31 for the import of 950,000 tonnes of Ukrainian wheat and flour, 400,000 tonnes of corn and 250,000 tonnes of barley, FranceAgriMer said.

 

The 28-nation bloc is planning to give Ukraine manufactured products and other exports open access to its half billion consumers even before a proposed bilateral free-trade accord comes into force later this year, as part of a package of trade benefits to cement Kiev's historic shift away from Russia.

 

In order to ensure that EU farmers are not harmed by the unilateral trade action, the EU set quotas on the volumes of duty-free imports of certain farm products including grains, meat, sugar and milk products.

 

"As part of the political and financial support that the EU decided to give to Ukraine, a Commission regulation was passed on April 8 opening tariff-rate import quotas for Ukrainian grains," French farm office FranceAgriMer, which had a representative at the meeting, said in a note.

 

EU ministers still must sign off on the EU's unilateral trade measures, a step officials said could come later this month.

 

An EU official said that under the full free-trade deal, the quota volumes would rise within five years to one million tonnes for wheat, 650,000 tonnes for corn and 350,000 tonnes for barley.

 

The new quotas for Ukraine would be in addition to the EU's existing tariff-rate quotas for shipments from all countries of wheat, corn and barley. The corn quota is currently duty free, while wheat and barley imports under the quotas pay tariffs, after being duty-free in the two previous seasons.

 

The first half of the annual corn quota was exhausted in January, but another 138,994 tonnes will be open from July 1.

 

Ukraine's 2013-14 grain exports are likely to reach an all-time high of 33 million tonnes, against 23 million last season, its farm minister said last month.

 

The exclusive quotas for Ukraine could likely boost its position in the EU grain market, but FranceAgriMer said it expected Ukrainian volumes to shift from the existing quotas towards the new ones, rather than add up under both.

 

So far this season, corn has accounted for nearly two-thirds of Ukraine's grain exports, with shipments continuing at a fast pace despite political turmoil, ministry data showed.

 

The EU is the top destination for Ukrainian corn, with southern Europe and the Netherlands among its top clients. It provides more than half of the EU's total corn imports, analyst Strategie Grains said.

 

Eurostat data showed that the bloc imported 7.5 million tonnes of corn from Ukraine last season, around one million tonnes of wheat and less than 50,000 tonnes of barley.