Palm oil Ukraine: Likelihood of a ban and possible impacts on regional trade

Moving towards expanding trade relations with the European Union, Ukraine continues to bring its own legislation in line with European norms. Will harmonization of Ukrainian legislation lead to an “accidental” ban on palm oil?

Ukraine is located in  a strategic position in East Central Europe; lying on the northern shores of the Black Sea and the Sea of Azov, it borders a number of European countries – Poland, Slovakia and Hungary in the west, Belarus in the north, Moldova and Romania in the south-west and Russia in the east. Ukraine is the 3rd biggest regional importer of palm oil after Russia and Turkey and the world’s largest producer and exporter of sunflower oil. Based on USDA data, Over a period of 10 years,  Ukraine increased their import of palm oil from 172,000 MT in 2011 to 225,1000 MT in 2021.. This year the Ukrainian Parliament, Verkhovna Rada of Ukraine, registered a draft law 5148 which was picked up by the media as a ban on palm oil usage in food. The draft successfully passed the first reading and is now  ready to pass the second reading to become a law.

The attitude of Ukrainians to palm oil is generally neutral – among the mass consumer there is no fear of using palm oil for food. But at the same time, a certain segment  of the population is still wary of this product, believing many media reports about the negative effects of palm oil to  human health. Many of these messages are generated in Runet – the Russian-speaking segment of the Internet. The main negative theses are: the connection between the falsification of dairy products with vegetable fats, and the following claim that such a replacement can cause serious harm to health.

Ukrainian lawmakers have already tried to ban palm oil. In 2018, the Verkhovna Rada very quickly adopted in the first reading the bill No. 3871 on the prohibition of the use of palm oil, proposed by the Radical Party of Oleg Lyashko which was kept “under the rug” for two years. Even the negative conclusions on this document of two specialized parliamentary committees and the scientific and expert department of the parliament did not work. But then, in 2018, bill No. 3871 did not pass beyond the first reading.

In 2021 the attempts to ban palm oil resumed. On 25 February 2021, a draft law No. 5148 on “Amendments to Certain Laws of Ukraine Concerning Improving the Quality of Food Products Consumed by Children” was submitted to Verkhovna Rada for first reading. Initially the draft aimed at regulation of the food industry, and at improving control over food quality. The reduction of trans-fats consumption was put as a basis to the draft. However,  the authors of the draft went further, as they stressed on palm oil and tying it to  all the negative consequences to health with a single ingredient – palm oil.

On 23 September 2021, the bill was adopted as a basis. In the explanatory note to the draft the authors referred to ‘The palm oil industry and noncommunicable diseases’ – a paper published in WHO bulletin in 2019. The Committee of the Verkhovna Rada of Ukraine on Agrarian and Land Policy took into account the proposals and amendments, and submitted the draft for the second reading. In a meeting on 14 July 2021 the Committee on Agrarian and Land Policy recommended replacing the words “palm oil” with the words “vegetable fats, oils”, leaving the norm on max content of trans fats introduced by the authors unchanged. Now, the draft is ready and submitted to the Rada for the second reading.

The Ukrainian food industry perceived the proposed law to be ambiguous. Large international confectionery companies  in Ukraine were rather alarmed about the bill. The main concern was the separate labeling of products containing palm oil. According to the representatives of the confectionery industry, the label “contains palm oil” does not correspond to the interests of the food industry in Ukraine. In general, representatives of the Ukrainian industry reacted rather calmly to the bill. In private conversations, the opinion was expressed that the bill, if adopted, would not make significant changes in the  food industry. This is due to the fact that many points spelled out in the bill raise further questions. In particular, the procedure for determining the content / presence of palm oil in a product is not clearly stated. Without a standardized determination procedure, proving the presence or absence of palm oil in a product is problematic. But there are still risks that in one way or another as  the proposed draft may cause harm to the image of palm oil remains.

Adoption of a draft mentioning palm oil by one country may be perceived as a signal to  all neighboring countries to adopt the same action which in this case consequences would be unpredictable. Earlier, in neighboring countries, there have been attempts to introduce a ban on palm oil to varying degrees,as for example when in 2019, a group of deputies of the Mazhilis appealed to the Prime Minister of Kazakhstan, Askar Mamin, with a request to ban food products containing palm oil. Similar attempts were taken in Kyrgyzstan, and before that in Russia.

Prepared by Aleksey Udovenko

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