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Ukrainian Poultry Production Returns to Upward Trend

07 October 2016

UKRAINE - After some slowdown in 2015, Ukraine’s poultry production is returning to its upward trend, according to the latest report from the US Department of Agriculture's Foreign Agricultural Service (FAS).

Production in 2016 is expected to be record-high, and production in 2017 is expected to continue the growth, boosted by low feed grain prices from the 2015/16 grain crop.

In 2016 many large producers invested in production expansion and upgrades of existing facilities. The domestic industry continued to be very concentrated, with the top-6 broiler producers controlling over 93 per cent of the market.

The largest Ukrainian producer has significant market power with approximately 61 per cent of total production, FAS said. Smaller producers, with 3-12 per cent market share, either held steady or were able to increase their production and efficiency in 2016. However, the market share of the smallest producers continues to shrink.

Meat protein consumption in Ukraine suffered significantly due to disposable income drop in 2013-2015. Since it is already the cheapest protein, consumers had no option to substitute for poultry. As such, demand volume remained stable, but value dropped notably.

The domestic industry exhibited little willingness to satisfy domestic demand preferring export markets in the Middle East, EU and Africa, even as cheap offal suppliers from Poland and Germany filled the gap in the domestic market.

Imports in 2017 are expected to be somewhat lower as incomes recover, allowing consumers to resume consumption of other, higher-value sources of protein.

Meanwhile, Ukrainian poultry exports are expected to reach an all-time high, putting Ukraine in the world’s top 15 exporters.

ThePoultrySite News Desk

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