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The Economic Impact of Agricultural Embargo on Ukraine: Losses Estimated at $230 Million per Month

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Moscow, September 24 – Ukraine’s Losses from Agricultural Product Embargo Could Be Significant

Ukraine is facing potential losses of up to $230 million per month due to the embargo on its agricultural products imposed by Slovakia, Hungary, and Poland. This amount is roughly equivalent to the country’s quarterly earnings from gas transportation. These calculations are based on data from the statistical services of the mentioned countries.

Background

On September 15, the European Commission decided not to extend restrictions on the import of four types of Ukrainian agricultural products to several EU border countries. However, Slovakia, Hungary, and Poland unilaterally extended the ban and included additional products. In response, Ukraine filed a complaint with the World Trade Organization against these countries. Ukraine’s Economy Minister Taras Kachka also mentioned the possibility of imposing retaliatory sanctions and banning the import of fruits and vegetables from Poland.

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Impact of the Embargo

Among the three countries, Poland’s ban will likely have the most significant effect on Ukraine. It includes products such as wheat, corn, wheat flour, rapeseeds, and sunflower seeds, as well as certain types of cakes. In the previous year, Poland purchased an average of $112 million worth of these goods from Ukraine between September and December.
Hungary’s ban covers the import of 24 types of products, including grains, seeds, sugar, oil, and honey. This embargo could cost Ukraine an estimated $89 million per month, which is the average amount of Ukrainian goods purchased by Hungary at the end of last year. Slovakia, on the other hand, only banned the import of wheat, corn, rapeseed, and sunflower seeds. Ukraine exported an average of $26.4 million worth of these products to Slovakia during the last four months of 2022.
The main products causing potential losses for Ukraine are corn, with the three countries averaging $100 million in monthly purchases at the end of last year, and rapeseed, with an average monthly import value of approximately $74.5 million from September to January 2022. Sunflower seeds ($25.6 million per month) and wheat ($16.2 million per month) are also significant. Additionally, Hungary’s import of sunflower oil accounted for $3.5 million per month.
Overall, the agricultural product embargo imposed by Hungary, Poland, and Slovakia could cost an average of $227.2 million per month. This amount is almost equivalent to the quarterly earnings of $234.4 million that Naftogaz, Ukraine’s national oil and gas company, received from gas transportation in the previous year, according to the News Agency’s analysis of the company’s reports.

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