The Verkhovna Rada has decided to impose a 10% export duty on the export of soybeans and rapeseed seeds. According to the new legislative initiative, the duty rate will gradually decrease: starting in 2030, it will be reduced by 1 percentage point each year until it reaches 5%. At the same time, farmers who export their own grown products will be exempt from this duty. The funds generated from the introduction of this levy will be directed to the State Fund for the Support of Agricultural Producers.
This is reported by Business • Media
Purpose of the Duty: Stimulating Processing and Supporting the Economy
The main goal of the new export duty is to activate domestic processing of soybeans and rapeseed. An example is the situation with sunflower: after the introduction of an export duty in 1999, the volume of its processing in Ukraine increased by 900%. Today, however, soybean and rapeseed processing plants are only operating at 65% capacity, so it is expected that the new measures will help improve their efficiency. According to forecasts, this will bring an additional 7.3 billion hryvnias to the state budget, and foreign currency earnings will increase by 238 million dollars. Furthermore, the creation of additional capacities will stimulate the construction of new enterprises in the sector.
“It is expected that the introduction of the duty will ensure an additional ₴7.3 billion in budget revenues, generate $238 million in foreign currency earnings, and contribute to the construction of dozens of enterprises.”
Business and Expert Reactions to the New Rules
At the same time, representatives of the European Business Association have urged the government to refrain from imposing the duty. The organization emphasizes that uninterrupted export of agricultural products is critically important for maintaining stability in the agricultural sector amid the war and for the further recovery of the economy.
The position of the American Chamber of Commerce is also ambiguous, as they believe that such duties could lead to violations of market competition principles, do not align with the strategic course towards Eurointegration, and create unequal conditions for international traders.
Meanwhile, analysts from the London Stock Exchange note that the new duty will strengthen domestic processing; however, it is likely to reduce the areas planted with soybeans and rapeseed by 20%.