On September 4, Ukraine implemented a 10% export duty on soy and rapeseed. This new tax, intended by lawmakers to protect domestic farmers from traders purchasing crops cheaply and reselling abroad at a premium, was also expected to boost the state budget. However, the law did not clearly define how to distinguish between producers and traders, leading customs officials to apply the duty to all exporters indiscriminately, effectively halting the export of these crops.
Within three weeks, soy and rapeseed exports dropped by half compared to the previous year. Large cargoes have been left stranded in ports, warehouses, and on railways—about 500,000 tons are blocked. Ukrainian farmers are losing millions of dollars every day, and many smaller producers have been forced to sue to recover overpaid duties.
International buyers are already turning to alternative suppliers—Chinese companies are increasing purchases of Brazilian soy, and European traders are seeking deals with Canada and Australia. The European Union is monitoring the situation closely, as the Association Agreement prohibits new recurring export duties.
Lawmakers and government officials are shifting blame while promising procedural fixes by the end of the month, but customs agencies doubt the practicality of such measures. Meanwhile, traders have found ways to bypass duties by re-registering as farm operations.
It is estimated that Ukraine lost around $300 million in just three weeks. The country’s reputation as a reliable exporter is in question, while farmers bear the cost of legislative haste. This case underscores the need for well-considered policymaking and industry consultation ahead of major regulatory changes.
