Unmanufactured tobacco and refuse market Ukraine

Earlier Report Observations

From 2018 to 2020, the legal market volume for unmanufactured tobacco in Ukraine contracted from 50 551 tonnes to 42 649 tonnes. This decline coincided with a steady expansion of the illegal shadow market, whose share grew from 4.7% to 9.9%. High excise taxes and insufficient state control encouraged consumers to seek cheaper, untaxed products, a shift accelerated in 2020 by COVID-19 pandemic disruptions to logistics and enforcement.

The legal market saw a temporary recovery to 44 941 tonnes in 2021, even as the shadow market's share grew further to 17.2% amid reports of weakened control. This trend was abruptly reversed in 2022 when the outbreak of full-scale war caused a collapse in the legal market to 20 586 tonnes. Military actions severely disrupted supply chains and state oversight, driving more activity into the illegal sector.

The legal market continued to shrink in 2023, falling to 19 267 tonnes. The illegal market reached a record 25.7% share in October, fueled in part by the non-renewal of a production license for one major factory due to a lack of certification. In response, authorities adopted Law No. 1978-IX in July 2023 to reduce the harmfulness of tobacco products and implemented stricter enforcement measures.

Production unmanufactured tobacco and refuse Ukraine

In kind, 2017-2020, t

Top producers of unmanufactured tobacco and refuse, 2017-2020

World map of production of unmanufactured tobacco and refuse, 2017-2020

Ukraine's production of unmanufactured tobacco and refuse has increased for the second year in a row. In 2019, output reached 1 690 tonnes, followed by a significant rise to 1 950 tonnes in 2020, marking a 15.4% year-on-year growth. Looking at the broader period from 2017 to 2020, production expanded by 36.4%, which translates to an average annual increase of 10.9%. The lowest production level was recorded in 2018 at 1 290 tonnes, when output fell by 9.8%. This was followed by a sharp recovery in 2019, with production jumping 31.0%.

Annual dynamics of production Ukraine in kind, 2017-2020, t

Exports unmanufactured tobacco and refuse to Ukraine

Exports in kind, t

Ukraine's exports of unmanufactured tobacco and refuse have declined for the third consecutive year. In 2019, export volume stood at 745 tonnes, dropping to 616 tonnes in 2020, a decrease of 17.3%. Over the four-year span from 2017 to 2020, exports fell by 45%, averaging an annual decline of 18.1%.

Annual dynamics of product's exports to Ukraine in kind, 2017-2020, t

From 2017 to 2020, Malaysia and Russia were the primary destinations for Ukraine's exports of unmanufactured tobacco and refuse in volume terms, while other markets played a smaller role.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports to Ukraine in kind, 2017-2020

Exports in value, M $ US

The value of unmanufactured tobacco and refuse exports from Ukraine has decreased for the third year in a row. In 2019, exports were valued at 0.125 million US dollars, falling to 0.1 million US dollars in 2020, a 20.0% drop year-on-year. Between 2017 and 2020, export value declined by 76.6%, with an average annual reduction of 38.3%.

Annual dynamics of product's exports to Ukraine in value, 2017-2020, M $ US

Between 2017 and 2020, the top destinations for Ukraine's exports of unmanufactured tobacco and refuse by value were Malaysia, accounting for 53.7% of total export value, Russia at 17.8%, and Belgium with 8.4%. Together, these three countries made up 79.9% of all export flows.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports to Ukraine in value, 2017-2020

Imports unmanufactured tobacco and refuse in Ukraine

Imports in kind, t

Ukraine's imports of unmanufactured tobacco and refuse have fallen for the third consecutive year. In 2019, import volume was 44 850 tonnes, decreasing to 41 315 tonnes in 2020, down 7.9%. Over the period from 2017 to 2020, imports dropped by 25.9%, with an average annual decline of 9.5%.

Annual dynamics of product's imports in Ukraine in kind, 2017-2020, t

From 2017 to 2020, Brazil, Malawi, and Italy were the largest suppliers of unmanufactured tobacco and refuse to Ukraine in volume terms, contributing 22.4%, 14.3%, and 8.4% of total imports, respectively. However, their combined share was only 45.1%, indicating a diversified import structure with many other countries involved.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports in Ukraine in kind, 2017-2020

Imports in value, M $ US

Imports of unmanufactured tobacco and refuse into Ukraine have declined for the third year in a row. In 2019, import value was 232.9 million US dollars, falling to 225.9 million US dollars in 2020, a decrease of 3.0%. Between 2017 and 2020, import value dropped by 17.2%, with an average annual reduction of 6.1%.

Annual dynamics of product's imports in Ukraine in value, 2017-2020, M $ US

Between 2017 and 2020, Ukraine sourced unmanufactured tobacco and refuse from a wide range of countries. Even the top suppliers—Brazil, Malawi, and Germany—collectively accounted for just 49.4% of total import value, highlighting the diversity of the import market.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports in Ukraine in value, 2017-2020