UKRAINE will continue to grow poultrymeat production and exports in 2020, but it will be at a slower rate than previous years, new analysis suggests.
The country is now the world’s seventh-largest chicken meat exporter.
It will remain a net importer of poultrymeat from Europe, primarily buying in cheaper cuts and offal.
Late last year Ukraine and the EU finalised a new tariff rate quota for exports of new poultry parts, limiting a loophole that allowed producers to effectively send unlimited breast portions with a piece of wing and skin attached to the bloc.
As a result of the new tariffs, the share of Ukrainian poultry exports to Europe will shrink, according to the latest GAIN report from the United States Department of Agriculture.
Producers will instead concentrate on markets in the Middle East, Eastern Europe and Northern Africa, the report said.
It adds that the avian influenza outbreak reported in January this year would have only a “moderately negative impact on 2020 exports”.
Ukraine’s poultry industry is dominated by one company, MHP, which has a 70% market share.
The firm finished a significant production expansion program in central Ukraine that cost USD$1bn. That one facility was responsible for the majority of the total expansion in poultrymeat production for the country in 2019.
The new facility marks the end of a major poultry expansion cycle, and growth in the coming years will be more modest, the USDA report suggests.
In 2019, the Middle East became Ukraine’s top export destination for chicken meat by volume. Europe remains the number one destination by value.
Only five Ukrainian facilities are approved to export to the EU, and of those MHP has the largest approved facility and has historically utilised almost the entire quota allocated to the country.
MHP is expected to continue developing facilities within Europe, with expansion on the cards in Serbia and Croatia, and plans to remodel cutting plants in Slovakia and the Netherlands.
Despite this, the report says that focus will shift over time. “Markets in the Gulf countries will eventually replace the EU market as the major export destination for Ukrainian chicken meat.
“The region already became Ukraine’s top destination by product volume in 2019. This growth took place despite some market access issues.”