The Yosypenkos, a family of beekeepers, aren’t planning to export their homemade honey to the European Union.
Neither do many other smaller honey producers in Ukraine. The reason: They lack connections with importers and money to pay customs.
Ukraine’s duty-free export quota with the EU has been quickly used up since the nation’s free-trade agreement came into effect last year.
The “first come, first served” quota system meant big producers this year used up the 5,200-ton quota by Jan. 11.
Further exports are subject to a 17 percent duty, which effectively prevents the smaller producers from exporting.
“We’d like to export, but a small beekeeper still can’t afford it – only big exporters can,” says beekeeper Roman Yosypenko of Kyiv. Other impediments are the cost of quality certificates, taxes and a lack of business connections in Europe.
The present trade agreement started functioning for Ukrainian and EU exporters in January 2016. Prior to that, from April 2014, there was a customs-free export regime for Ukrainian exporters to the EU, while EU exporters to Ukraine paid duty as usual.
Ukrainian producers can trade duty-free with the bloc within quotas on 36 commodity groups.
Ukrainian honey exporters, however, say their quota is too low. It is set to increase, but only by another 800 tons by 2020.
Once the quota has been used up, the 17 percent customs duty kicks in, leaving many disappointed. Even bigger producers say they don’t see much benefit from the new trade deal from the EU.
Honey producer Bartnik is a Ukrainian company that can afford to pay the export duty. But its marketing director Vadym Bankovsky says he hasn’t noticed any benefit from the EU trade deal yet.
“Nothing has changed at all,” he says.
Others in the industry agree.
“Nothing at all,” says Dariia Hrytsenko, an expert at Ukrainian Agribusiness Club.
“We haven’t seen new opportunities since the agreement,” beekeeper Yosypenko says.
Less than two weeks into 2017, Ukraine has already used up its 5,200-ton quota of duty-free honey exports to the European Union. The EU is the world’s biggest importer of honey, consuming 150,000 tons in 2015.
EU’s sweet tooth
The EU is the world’s biggest importer of honey, consuming 150,000 tons in 2015, of which Ukraine supplied 26,000 tons.
In 2016, Ukraine supplied 36,000 tons, and less than three weeks into 2017, it has already supplied 14,000 tons.
The 28-country bloc quadrupled imports of Ukrainian honey between 2011 and 2015, reducing its imports from Russia after the Kremlin launched its war against Ukraine in 2014.
Within the EU, Germany and Poland remain the largest importers of Ukrainian honey.
The potential of Ukraine’s honey industry is huge, says Ukrainian Agribusiness Club’s Hrytsenko. “Ukrainian honey is competitive. It’s cheaper, but the quality is just as good,” she said.
The price of Ukrainian honey on the EU market is $2,300-$3,000 per ton. European-produced honey, in contrast, costs $4,000 per ton.
Ukraine produces 70,000 tons of honey annually – 4.1 percent of the global production. About 700,000 Ukrainians work in the honey producing industry: either beekeeping, collecting honey, or exporting it.
Honey accounts for about 1 percent of Ukraine’s export revenues. In 2014, Ukraine exported $95 million worth. The sum in 2015 was slightly less, at $84 million.
