Uncertainty about wheat exports from Ukraine
Ukraine has announced that it will introduce a new system of minimum export prices for grains and oilseeds from early December.
The country decided to do this to prevent the use of artificially low prices with the aim of evading taxes. Ukrainian traders, united in the UGA trade union, reacted with concern. They have said that the new approach puts half of Ukraine’s wheat exports at risk.
Could this create space in the market
The system leads to uncertainty on the market and the loss of an important part of exports, UGA reports. This could create additional space on the world market for producers from other parts of the world, such as the EU. But it is by no means certain that this extra space will be available. This depends on the minimum prices that Ukraine will charge and on world market prices. In addition, the question is how strict the control will be on compliance with the minimum prices.
Competitive advantage for Ukraine
Russia has previously set minimum export prices, but many traders manage to get around them. This may soon also be the case in Ukraine. In addition, Ukraine will not have to pay import duties in the EU until June 5, 2025, a competitive advantage that will remain for the time being.
