The new trade agreement between Ukraine and the EU provides for an increase in duty-free quotas for key Ukrainian dairy exports. This includes butter, with a 233.3% increase (up to 10 thousand tonnes per year); skimmed milk powder, with a 308% increase (up to 20 thousand tonnes per year); and condensed milk, with a 150% increase. However, to gain greater access to the EU market, the Ukrainian government and businesses must complete the harmonization of EU production standards for animal welfare, veterinary requirements, environmental protection, pesticides, and GMOs by 2028.
Oleh Nivievskyi, head of the Center for Food and Land Use Research at the Kyiv School of Economics, noted in a post on his Telegram channel that trade with the EU is vital for Ukraine, as almost 60% of Ukrainian exports are shipped to the European market. Since 2016, trade between Ukraine and the EU has been governed by the Deep and Comprehensive Free Trade Area (DCFTA 1). Under this old agreement, over 90% of goods were duty-free, but agricultural products were subject to restrictions in the form of 40 tariff quotas.
However, after the start of Russia's full-scale invasion of Ukraine, a regime of Autonomous Trade Measures (ATMs) was in effect for Ukrainian exporters until June 2025. This effectively liberalized trade between Ukraine and the EU, allowing Ukrainian companies to supply dairy products to the European market without duties or quotas. Due to Russia's blockade of Ukraine's Black Sea ports, Ukrainian agricultural products were primarily supplied to the EU. According to the expert, in some months, Ukraine's share of the sugar and grain markets exceeded 50%. This triggered a wave of protests from farmers in Poland and other European countries, which ultimately led to the European Commission's cancellation of ATMs for Ukrainian exporters.
As a result, since June 2025, trade between Ukraine and the EU is once again regulated by the old DCFTA 1 agreement, with the exception of protective measures on steel. In autumn 2025, the Council of Europe is expected to approve a new trade agreement, DCFTA 2, which, according to Oleh Nivievskyi, is an improvement over DCFTA 1 but is not as favorable for Ukrainian exporters as the ATMs. Under the new agreement, existing quotas for agricultural products such as eggs, poultry, sugar, wheat, corn, honey, and apple juice are planned to be significantly increased.
Duty-free quotas are also expected to increase for key Ukrainian dairy exports, namely butter by 233.3% (to 10 thousand tonnes per year), skimmed milk powder by 308% (to 20 thousand tonnes per year), and condensed milk by 150%.
"For the Ukrainian dairy industry, it is crucial to maintain fair and competitive export conditions for domestic dairy products, as by the end of 2024, about 25% of all raw milk supplied for processing went to the production of dairy products intended for export," comments AMP General Director Hanna Lavreniuk. "Therefore, any future increase in raw material production will require strengthening foreign trade."
However, in exchange for greater access to the European market, Ukraine must transition to EU production standards concerning animal welfare, pesticides, GMOs, veterinary requirements, and environmental protection by 2028. These measures will likely result in additional costs for Ukrainian producers. The new agreement will also include a mechanism to protect the EU market if any member state perceives a threat to its producers from Ukrainian exports.
Press service of the Association of Milk Producers
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