Ukraine facing revenue loss after EU poultry ban

By Vladislav Vorotnikov

- Last updated on GMT

Related tags International trade Ukraine Livestock Poultry

The H5N8 AI epidemic has been detected across Africa, Asia and Europe this year
The H5N8 AI epidemic has been detected across Africa, Asia and Europe this year
Ukraine’s poultry industry is set to lose up to UAH150 million ($5.7m) per month due to the EU ban on poultry imports, according to the Ukraine Agribusiness Club (UAB).

The ban, introduced on 6 December, followed the first outbreak of avian influenza​ (AI) in the country in eight years. This was discovered in the Kherson region of Ukraine on 30 November.

Zoryana Goshovska, UAB deputy general director of communications, told GlobalMeatNews​ that this restriction could lead to oversupply in the domestic chicken market and if producers were not able to redirect export streams, prices would start to fall.

In January-September 2016, the EU accounted for nearly 20% of all Ukraine chicken exports or $52.5m in value terms, estimated Goshovska. Ukraine has been supplying the EU with an average of 3,000 tonnes (t) of poultry meat per month, primarily within the quota system, which allows imports of 36,000t of poultry to the EU from Ukraine in 2016.

Limited impact

Meanwhile, representatives of the largest poultry manufacturers believe the impact of import restrictions will be limited, as long as export streams are diversified.

Anastasiya Sobotyuk, director of IR, corporate secretary of MHP, told GlobalMeatNews​: “The most important point here is that the company’s export sales are very well diversified. So we can arrange for the volume to go to other destinations.”

She also noted that the AI outbreak took place far from the company’s facilities. “Our poultry farms are located far from the Kherson region and our birds live in chicken houses, with no access to wild birds. We don’t have any poultry operations near the Kherson region.

In the meantime, we are waiting for this issue to be regionalised as soon as possible, as the current case refers only to the Kherson region and householders. That is why, within 10-14 days after regionalisation, as stipulated in the DCFTA ​[Deep and Concentrated Free Trade Areas], a corridor should be created for exports to continue.​”

Nationwide ban surprising

Sobotyuk added that approximately 20% of MHP’s total poultry exports went to the EU, accounting for only 6% of total MHP poultry production in 2016.

Meanwhile, Alexei Marchenko, CEO of the second-largest Ukraine poultry producer, Agromars, said it was surprising that the EU had banned imports of poultry from the entire territory of Ukraine. He added that, following AI outbreaks in Europe​, Ukraine veterinary services had only restricted import supplies from the regions affected by the disease.

However, Marchenko suggested that the import levels to the EU approved within the quota system were extremely low and described it as a “drop in the ocean​” of the country’s total poultry exports.

Meanwhile, Ukraine’s State Food and Consumer Service declared its intention to fight the restrictions as, according to a report by the regulator, it has submitted information to the EU on the measures taken to liquidate the AI outbreak and establish regionalisation in the country, with the aim of restoring export deliveries from the country’s regions not affected by the disease.

However, the AI outbreak in Ukraine has alarmed veterinary officials in neighbouring Russia, where veterinary body Rosselkhoznadzor has ordered poultry farmers to shift to the closed mode of farm operations in regions bordering Ukraine and has introduced enhanced monitoring on AI.

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