Ukraine increased poultry production and exports

Ukraine increased its poultry production and exports in 2014. In 2015, production growth will continue slowing down, impacted by currency exchange rate swings and weakening domestic demand, according to a report by USDA Foreign Agricultural Service.

Ukraine increased its production and exports despite all of the political and economical turmoil in the country. According to USDA exports will serve as the major revenue source for large producers. Russia’s role as an export market on the other hand will become negligible, states the report.

Ukraine is expected to completely fulfill Europe’s import TRQs (tariff-rate quotas). Access to EU products in Ukraine will remain subject to import duties. Import demand will continue to concentrate on the lower-end market segment, mainly for products for further processing.

Devaluation generates problems for poultry producers

The current political and economic crisis including military and police operations in Eastern Ukraine had a profound impact on the poultry market. Massive devaluation generated problems for small and medium-sized producers that could only sell their product domestically, but sourced inputs from abroad (such as veterinary medicine, feed additives, and machinery). In 2014, large poultry producers exporting their products to middle eastern and European markets were able to benefit from increased revenues, but also assumed losses due to hard currency bank loans and the increased cost of inputs.

Poultry consumption remained relatively high

Consumer incomes continue to slide, but poultry consumption remained relatively high and even grew moderately in 2014. Poultry consumption in 2015 is expected to stabilize, while some growth in exports remains possible. Commercial poultry production in Ukraine remains strong as red meat consumption falls. All major producers report stronger consumer demand and increases in sales. However producers also reported lower revenue due to the devaluation and real decline in prices.