EU to cut Ukrainian wheat, sugar imports by 70-80% under new quotas

By Julia Payne and Gus Trompiz

BRUSSELS/PARIS (Reuters) -The European Union will cut imports of Ukrainian wheat and sugar by up to 80% to address the concerns of its farmers, according to quotas announced on Friday, that are likely to drive Ukraine growers to sell more to markets in Asia and Africa.

In a show of solidarity following the start of the Ukraine war in 2022, the EU opened up its food markets and temporarily waived duties and quotas.

But as farmers across the bloc protested against a flood of cereals, sugar and poultry from Ukraine, Brussels moved to re-introduce the quotas.

Traders say Ukraine has defied expectations by continuing to ship large volumes of grain via the Black Sea, but the war shows no sign of ending and Western support has faltered. The United States paused some missile shipments this week.

Officials on Friday said Russia had carried out the worst drone attack of the war.

The quotas announced on Friday will be higher than those in the first free trade agreement between the EU and Ukraine in force since 2016, but significantly below the volumes imported over the last three years duty-free.

They follow a provisional deal reached on Monday and set the annual quota for wheat at 1.3 million metric tons, a 30% rise from pre-war levels of 1 million tons, a senior EU official said on Friday.

It represents a drop of 70-80% from the last three seasons, when the EU imported around 4.5 million tons of Ukrainian wheat in the 2024/25 season to June 30, 6.5 million tons in 2023/24 and 6.1 million tons in 2022/23, according to Commission data.

The EU set the quota for Ukrainian sugar at 100,000 tons, up from 20,000 tons before the war, but down from quota-free imports of 400,000 tons in 2022/23 and over 500,000 tons in 2023/24.

Ukrainian farm lobby UCAB said on Friday the quotas were too low, calling the proposal a "step back".

They should provide relief for European Union farmers, many of whom have suffered from higher costs and stricter environmental rules and who are also concerned by a planned EU deal with South America's Mercosur bloc.

Grain traders say competitively priced Ukrainian wheat should be able to find alternative buyers in North Africa and Asia.

For barley, the EU's import quota for Ukraine would rise to 450,000 tons from 350,000 tons. That would be in line with what the EU imported in 2024/25, though only about half of the volumes taken in 2022/23 and 2023/24.

For poultry, the import quota was increased to 120,000 tons from 90,000 tons.

The revised trade agreement between the EU and Ukraine includes 40 goods and still needs to be adopted by a qualified majority of member states.

In addition, the agreement allows for individual EU countries to take further measures to safeguard their markets if they are destabilised by quota volumes, the official said.

(Reporting by Julia Payne and Gus Trompiz;Editing by David Goodman and Barbara Lewis)