USDA projects Ukrainian poultry growth

Ukraine’s poultry industry will continue to grow in 2012, but at a somewhat slower rate, according to a recent USDA Gain Report.

In 2011, Ukraine decreased its imports to record low level, but remained a net importer of poultry products. The US share of the Ukrainian market had dropped considerably due to local production growth. The need to export will push Ukrainian poultry to Central Asia and Far East markets. Ukraine’s domestic market will remain price sensitive with limited demand for imported poultry offal. Ukraine is likely to remain an exporter and an importer of poultry at the same time as in 2010/11.

Poultry production in 2011 was somewhat less than expected due to production decreases by a number of small regional producers which were not able to survive competition with bigger players. An additional negative impact was due to Ukraine’s second largest producer Agromars stopping production on one of its production sites in the summer of 2011.

In 2011, Ukraine did not become a net poultry exporter, although it closely approached this status. Production decreases, problems in foreign markets, and high domestic price led the major producers to concentrate on the Ukrainian market. Foreign expansion is likely to be delayed, not canceled. New facilities that are coming on-line in the near future will push Ukrainian poultry abroad, or lead to a significant crisis in the industry.

On February 8, 2012 the Minister of Agricultural Policy of Ukraine Mr. Mykola Prysiazhnyuk met with Deputy Head of Rosselkhoznadzor Dr. Nepoklonov in an attempt to open the market for Ukraine’s meat products in Russia. The Ukrainian mass media reported that an agreement was reached. Despite the formal agreement, Ukrainian exports to the Custom Union Countries will remain highly vulnerable to political risks, as has happened recently to other Ukrainian exports to Russia. Ukrainian mass media carefully monitored the situation and commented on the political nature of restrictions.

Source: USDA Gain Report