The Russian invasion of Ukraine has left the Armenian market in short supply of broiler meat, while local poultry farmers struggle to find a replacement for Ukrainian feedstuff.
This is what Sergey Stepanyan, Chairman of the Union of Poultry Breeders of Armenia, told local publication, Armenian News.
Stepanyan estimated that before the war, 25-30% of feedstuff was imported from Ukraine, including soybean, corn, and sunflower meal. The rest was purchased from Russia and a few other countries.
Now deliveries from Ukraine are completely suspended, Stepanyan said, adding that this was primarily associated with supply disruptions as Ukraine ports on the Black Sea shut down operations.
“Two large ships, which were supposed to load the ordered feed, approached Kherson, but from there, due to force majeure, it was not possible to continue transportation. By this time, the feed should have been on its way,” Stepanyan said.
“We have not yet figured out how we can replace the lost quantities. Deliveries from Ukraine were of a long-term nature. It looks like no country can urgently replace such volumes. Russia will not be able to do this since it does not have such opportunities. These crops are primarily grown in Ukraine,” he added.
In theory, Armenia could import feedstuff from Brazil or Argentina, but this will definitely take a toll on production costs due to higher transportation prices. Besides, the devaluation of the Armenian dram, which has fallen sharply alongside almost all other currencies in the post-Soviet space since the beginning of the war, also promises to make imported goods more expensive for Armenian farmers.
Stepanyan said that things are similar to the Russian rouble, which means that Russian companies have no clarity at what price to sell their products.
“We have feedstocks for 1.5 to 2 months,” Stepanyan said, adding that it looks like some kind of a ‘sixth sense’ helped farmers who purchased and imported unusually large quantities of feedstuff during the past several months.
The other side of the problem is that Armenia used to import frozen chicken primarily from Ukraine. Now, Armenian importers will have to source broiler meat in other markets.
Armenian poultry farmers meet only 33% of demand on the domestic market. Ukraine accounted for 40% of poultry meat imports in the country, Stepanyan said.
The government estimated that domestic poultry production in Armenia is equal to roughly 15,000 tonnes of broiler meat per year, while imports amount to close to 44,000 tonnes per year.