Ukraine's Poultry Getting Ready to Pounce on European Markets

UKRAINE - Ukraine's top agribusinesses specializing in poultry and eggs are bound to have a good year in 2013 as a new market of more than 500 million people has just opened for them.
calendar icon 12 December 2012
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On 4 December, the European Commission formally allowed imports of Ukrainian poultry, eggs and other products to the European Union, opening the market for Ukraine’s top agricultural holdings, such as London-listed MHP and Avangard, and Agromars, which is not listed. KyivPost reports that exports might start as early as the first quarter of next year.

“Now, of course, we need to wait a little for all technical measures to be taken by the EU for the decision to take effect, but the main thing is that it has been approved,” Ukraine's Foreign Kostyantyn Gryshchenko tweeted about the event.

Last year, Ukraine only exported 50 kilotons, or 5 per cent, of its total poultry production. Most of the exports went to ex-Soviet countries. Shell egg exports stood at 39 kilotons, or 4 per cent of production, and also mainly went to ex-Soviet countries and Iraq.

Vertically integrated MHP specializes in poultry and poultry products. The company said it’s is prepared to start exporting poultry products to Europe as of early 2013.

“As of the beginning of the next, 2013 year, Myronivskiy Khliboprodukt can start exporting its products to the EU countries because we have long ago received the appropriate permits from the representatives of the European Council,” MHP said in its 5 December statement.

In its analytical note on 6 December, Dragon Capital Investment Company said that Agromars and Avangard are also already in compliance with the food safety requirements of the European Commission for Health and Consumers (SANCO).

It's not clear, however, when all the formal procedures within the EU will be concluded and Ukraine's companies will be able to start exporting to Europe. Several amendments still need to be made to EU health regulations, and then the new legislation will have to be translated into official EU languages.

In its own press statement, Ukraine's Agricultural Ministry estimated that the bureaucratic procedures within the EU will take two or three months to complete after the vote was taken. Agricultural Minister Mykola Prysyazhnyuk said that, in the meantime, all potential suppliers will be audited by health services.

“Ukraine is now a fully fledged player on the world's food market, and the hi-tech poultry production industry has overcome a previously unreachable frontier,” Prysiazhniuk said in his statement on 6 December.

The news is welcomed by the top agricultural holdings because all of them plan to expand their capacity next year. Dragon Capital estimated that Avangard and Ovostar, another top Ukrainian egg producer, could more than double their egg processing capacities in 2013, while MHP is considering buying a meat processing plant in the EU in the short to medium term.

Moreover, after the EU introduced stricter health standards for poultry and egg production, many EU producers were forced out of business, which forced prices up on theses foodstuffs, Dragon reported. The company said this created “favorable pricing conditions for Ukrainian producers.”

Prysyazhnyuk said that his ministry continues to negotiate with the EC to also export milk and veal to the European markets.

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