Ukraine's agricultural export policy has recently undergone a significant overhaul, with the official implementation of a new 10% export duty on soybeans and rapeseed. This policy is enacted under Law No. 4536-IX, signed by President Zelensky on September 2, 2025, which critically amends the "Law of Ukraine on Export Duty Rates for Oilseed Crop Seeds." The new regulation took effect the day after its publication (September 4) and is scheduled for full implementation starting September 4, 2025. This move is anticipated to have far-reaching implications for both the Ukrainian and global oilseed markets.

I. Policy Details and Implementation Mechanism

According to the newly amended law, all agricultural products classified under commodity codes 1201 (soybeans) and 1205 (rapeseed), regardless of whether they have been crushed or not, will be subject to an export duty calculated at 10% of their customs declared value. This means that, starting from September 4, 2025, all eligible exporters will face an additional 10% cost when shipping soybeans and rapeseed out of Ukraine.

Notably, the law also outlines a long-term, gradual mechanism for adjusting the duty. From January 1, 2030, the export duty rate will incrementally decrease by 1% annually until it eventually stabilizes at 5% at a certain point. This phased adjustment strategy reflects the Ukrainian government's cautious approach in navigating policy transitions, striving to balance short-term market impact with long-term industrial development goals.

II. Exemption Clauses and Compatibility with International Agreements

Despite the general imposition of the duty, the new regulation also establishes two significant exemption clauses aimed at protecting the interests of domestic agricultural producers and cooperatives:

Exemption for Self-Produced Agricultural Goods: Agricultural producers who own farmland and export their own grown soybeans and rapeseed (matching commodity codes 1201 and 1205) will be exempt from this export duty. This measure aims to encourage farmers to directly participate in exports and ensure they receive the full benefits of their output.

Exemption for Agricultural Cooperatives: Agricultural cooperatives that export agricultural products grown by their members are also granted exemption. This helps to preserve the unique status of agricultural cooperatives and their role in economically supporting their members, encouraging collective development.

Furthermore, the Ukrainian government specifically emphasizes that the implementation of this new export policy will not conflict with any exemption clauses in international free trade agreements already signed by Ukraine. This implies that all exporters, regardless of whether they originate from countries with free trade agreements with Ukraine, must adhere to this new duty regulation, ensuring consistency and fairness in policy enforcement.

III. Market Impact and Strategic Intent

Market analysts generally believe that the introduction of this export duty policy will have a certain negative impact on the international competitiveness of Ukrainian soybeans and rapeseed in the short term. The additional 10% cost may reduce the price advantage of Ukrainian products in international trade, potentially leading to a decrease in export volumes initially. Some international buyers who rely on Ukrainian oilseeds might shift to other suppliers or demand that Ukrainian suppliers bear part of the duty cost.

However, from a long-term strategic perspective, this move is viewed as a key initiative by the Ukrainian government to stimulate the development of its domestic agricultural processing industry. By increasing the cost of raw grain exports, the government hopes to encourage domestic enterprises to increasingly crush and refine soybeans and rapeseed within the country, producing higher value-added products such as soybean meal, soybean oil, and rapeseed oil, rather than solely focusing on exporting primary agricultural commodities. This will help enhance the overall added value of Ukrainian agricultural products, create more job opportunities, and optimize its position within the international value chain.

The design of gradually lowering the duty rate also clearly reflects the government's pragmatic attitude in guiding the market to adapt to the new policy over time. Through a strategy of starting high and then gradually reducing, the government can immediately convey a strong signal to develop the domestic processing industry while providing a buffer period for the industry, allowing processing enterprises time to invest and expand capacity, and giving exporters space to adjust their supply chains and market strategies.

IV. Potential Challenges and Outlook

Despite the clear policy intent, the implementation of the new policy may also bring some challenges. For example, whether domestic processing capacity can meet the increased demand in a short period; whether processing enterprises can effectively absorb the pressure of rising raw material costs when facing international market competition; and how to ensure the effective implementation of exemption clauses to prevent policy arbitrage.

In summary, Ukraine's imposition of export duties on soybeans and rapeseed is a microcosm of its agricultural strategic transformation. This is not merely a short-term trade policy adjustment but a long-term strategic plan aimed at reshaping the domestic industrial structure and enhancing the overall competitiveness of agricultural products. Over the coming years, the production, processing, and trade landscape for Ukrainian oilseeds will undoubtedly undergo profound changes as a result of this new policy.