EU–Mercosur: Will it shake Ukraine’s grain position in Europe or just encourage competition elsewhere?
UkrAgroConsult
Article author:
The bigger risk for Ukraine exporters is if Mercosur expands globally, declining Ukrainian exports to the Asian markets, and indirectly narrowing Ukraine export destinations to those with already fierce competition.
In 2026, the market is focused on EU-Mercosur agreement, not because Europe suddenly needs South American commodities, but because any change in tariff rules can re-route flows, change spreads, and press commodity margins across Black Sea-Danube-Balkans.
On 9 January 2026 the EU Council authorized the signing of the EU-Mercosur agreement and the provisional application of the Interim Trade Agreement, the Partnership Agreement takes more time for ratification.
Wheat: Mercosur exports are not the key influencer in the EU market
UkrAgroConsult supposes that the near-term risks are overestimated. Even with record 2025 Argentina wheat crop (27.5 M mt, +46% y/y) and strong wheat export potential, EU access for Mercosur wheat does not look like completely liberalized, but is under quota of 180 K mt per year.
Corn
EU import quota with a 0% duty for Mercosur corn and sorghum is 1.0 M mt per year. However, the quota will reach the size of 1 M mt in six equal annual increases by 166,600 mt by year. The EU may apply safeguard mechanisms over a period of 12 years.
EU import quota for Ukrainian corn is traditionally much smaller than the actual corn exports, as the bigger than the quota duty rate depends on the ratio of European and world prices, being 0% for several years.
The main competitive factors for Ukrainian corn are corn prices, war/contract execution risks, freight, delivery reliability. Buyers in Spain and Italy will not pay extra premium for the logistics risks. If Ukrainian port execution is disrupted, alternatives (S. America, US, Canada) can be more attractive as they are more reliable to guarantee the deliveries.
This concerns also other Black Sea-Danube-Balkans countries: if logistics are under pressure, buyers shift from cheapest origins to least risky execution.
Sugar and ethanol
For Ukraine, the Mercosur-EU agreement can be more painful in sugar/ethanol than in wheat. These are politically sensitive pieces in the EU, and quota changes can impact those who get margin inside Europe.
Full version of the article is available to subscribers of ‘BLACK SEA & DANUBE GRAIN’ Weekly Report by UkrAgroConsult.
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