Ukrainian Steel, Agricultural Sectors in the Fight for Market Share Despite Non-Stop War

Why It Matters

The combined pressure on agriculture and steel threatens Ukraine’s export earnings and hampers European supply chains, while CBAM and EU quotas could accelerate a realignment of regional trade flows.

Key Takeaways

• Agriculture provides 7‑8% GDP, over half export earnings
• Grain exports hit lowest level since war began
• Sunflower crush down 9%, 26% below five‑year norm
• CBAM cuts Ukrainian steel EU sales by half
• Electricity prices rose 55% to $210/MWh

Pulse Analysis

Ukraine’s agricultural sector, long a cornerstone of its economy, now wrestles with a paradox of higher domestic production but dwindling export volumes. Continuous shelling of ports and power shortages have forced exporters to rely on costly emergency contracts, while the EU’s decision not to renew unrestricted grain access imposes strict quotas on wheat and barley. These constraints have lifted grain prices, as buyers pay premiums for reliable delivery, and the recent 10% export tax on rapeseed and soybeans is nudging more processing inland, attempting to offset the shortfall in sunflower output.

The steel industry confronts a dual shock: surging energy costs and the EU’s Carbon Border Adjustment Mechanism (CBAM). Electricity prices have jumped from $135 to $210 per megawatt‑hour, eroding profit margins for producers like ArcelorMittal Kryvyi Rih. Simultaneously, CBAM has stripped Ukraine of roughly half its EU steel market, eliminating over 1.2 million tonnes of annual shipments. Although rolled steel output rose 4.8% in 2025, it remains 65% below pre‑war levels, highlighting the sector’s fragility amid regulatory and infrastructural headwinds.

These developments signal a broader reconfiguration of Eastern European commodity flows. With the EU tightening steel slab origin rules and contemplating bans on Russian products, Ukraine’s exemption offers a temporary competitive edge, yet the CBAM burden may erode it quickly. Meanwhile, Russia’s grain strategy—targeting markets like Iran and Turkey—adds pressure on Ukrainian exporters seeking alternative destinations. Stakeholders must monitor policy shifts, energy pricing, and logistics bottlenecks to navigate heightened volatility and preserve market share in a landscape reshaped by conflict and climate policy.