Return of Ukraine wheat and barley curbs gives small boost to EU farmers

By Gus Trompiz and Pavel Polityuk

PARIS/KYIV (Reuters) - European farmers welcomed the European Union's re-introduction of quotas on Friday for Ukrainian wheat and barley as a small boost to their market, but they still face global price competition as Ukraine tries to export elsewhere.

The European Union waived duties and quotas on Ukrainian agricultural products following Russia's full-scale invasion three years ago.

It later capped volumes on some Ukrainian produce, including sugar, following an outcry from farmers over the price competition it posed.

It did not limit volumes of wheat and barley, however, and more than 4 million metric tons of Ukrainian wheat were imported into the EU since the start of the 2024/25 season last July.

Friday's expiry of the waivers means the EU has restored a pre-war regime of trade quotas, pending the conclusion of a new longer-term trade deal with Kyiv.

The re-establishment of the quotas was "a crucial first step" towards rebalancing the market, French wheat farmers' union AGPB said in a statement.

It reinstates a duty-free quota of 1 million tons annually for wheat and 350,000 tons for barley. Adjusted for the seven months left in 2025, that represents about 583,000 tons of wheat and 204,000 tons of barley available for the rest of the year.

European farmers, also concerned by a planned EU deal with South America's Mercosur bloc, blame Ukrainian competition for pushing prices below their production costs, which have also been inflated by higher energy and fertiliser bills since the war.

The quotas should shift Ukraine's exports away from Europe and keep more EU wheat at home, though the price benefit for farmers may be limited, traders said.

One trader, speaking on condition of anonymity, said Ukrainian grain that is not shipped into the EU will still find its way to the global market.

Reduced access to the massive EU market was a setback for Ukraine, but it should be able to pivot more towards North Africa and Southeast Asia, First Deputy Farm Minister Taras Vysotskiy told reporters. 

"We were there in 2021, and logistically it is not difficult. The question is the price," he said.

The EU and Ukraine, meanwhile, are working on a broader trade accord.

The EU's agriculture commissioner told Reuters the future deal would set quotas somewhere between current levels and the waivers.

Ukraine's trade representative Taras Kachka flagged the risk of market tensions.

"There will be no problems with corn supplies, but there are issues with wheat and barley, but we hope to reach acceptable volumes," he told a grain conference in Kyiv on Friday.

Ukrainian corn (maize) is subject to a pre-war 650,000 ton annual quota from Friday. But unlike wheat and barley, no impact is expected since the EU has a general zero tariff on corn.

(Reporting by Gus Trompiz in Paris and Pavel Polityuk in Kyiv; additional reporting by Kate Abnett in Brussels; editing by Barbara Lewis)