UKRAINE has cut back both production and exports following significant price drops and avian influenza restrictions so far in 2020.
Last year marked a significant expansion for the country’s poultrymeat producers – not just the dominant MHP, but smaller integrators as well.
But this year changes to trade policies, lower chicken prices and avian influenza outbreaks have hampered expansion, forcing cutbacks in production, according to the annual market evaluation by the USDA’s GAIN service.
Ukraine’s exports into the EU will be lower in 2020 because of the changes to quota limits agreed last year, and markets in the Middle East are expected to become the country’s largest chicken meat consumer.
In early 2020 an outbreak of highly pathogenic H5N1 avian influenza hit Ukraine in its central-western region, close to the country’s largest and most modern production facility.
Many of the major export markets – including the EU, Saudi Arabia, the United Arab Emirates, Iraq and Egypt imposed country-wide trade bans.
Another major blow was China putting a hold to export protocol negotiations – many thought trade of poultrymeat could have begun in spring 2020.
Coronavirus had a similar effect on Ukrainian producers as elsewhere – market uncertainty and a collapse in catering sales, leading to lower prices.
“Production indicators suggest a significant increase in industry-held frozen chicken meat stocks, depressing domestic market prices and likely resulting in accelerated exports in the second half of 2020,” the report suggests.
Despite this, poultrymeat production in Ukraine “remains efficient” so, in the medium-to-long term, production contraction is an unlikely scenario.