Transformation of the European Union Food Market and Prospects for Ukraine

The study examines the directions of development of the European food market and identifies the probable trends of its further transformation. It reveals the main tendencies of Ukraine’s agri-food foreign trade in the European market, assesses the competitiveness of the key agri-food commodity groups, and, on this basis, determines promising directions for enhancing competitiveness through increasing the share of exports of the most competitive products. The methodological framework of the study is based on a system of general scientific and specialized research methods. The analysis of the commodity structure and foreign trade flows of the agri-food sector relies on economic and statistical methods, in particular the balance method and the calculation of the geometric mean growth rate. To identify Ukraine’s comparative advantages in international trade in agri-food products, the study employs a competitiveness assessment method for each commodity group based on the Lafay Index, which measures the difference between the normalized trade balance of a specific product and that of all traded products of the country. The research is conducted using data from international and national statistical sources. The analysis of the commodity structure indicates negative changes in the value-added dimension. The share of trade in unprocessed commodities is increasing at the expense of a declining share of processed products, which allows for the conclusion that Ukraine’s agricultural exports remain predominantly raw-material oriented. It is emphasized that policy efforts should be focused on increasing the proportion of products with higher value added in agri-food exports. A comparative advantage analysis of Ukraine in relation to the European market is conducted based on the calculation of the Lafay Index, which makes it possible to classify the export commodity structure into competitive and non-competitive products. It is stressed that expanding the presence of Ukrainian agri-food products in the European market requires compliance with EU rules, regulations, and standards, as well as coordination of interests with EU member states and the avoidance of direct competition with European farmers. The study highlights the necessity of diversifying the structure of production and exports, developing agricultural processing, and expanding agricultural output in line with the environmental and climate requirements of the European Union.