Due to the Russian invasion, Ukraine has lost 20% of production capacity in the egg industry, while the remaining farms suffer from skyrocketing electricity and natural gas prices, the Ukrainian Union of poultry producers said.
In the past few months, Ukraine experienced a price hike in the egg market. From 1.8 hryvnia (US$0.05) per unit at the beginning of summer, the average retail price jumped to nearly 4.3 hryvnias (US$4.3), in some regions reaching 8 hryvnias (US$0.22). Skyrocketing prices even prompted the Ukrainian Antimonopoly Service to initiate an investigation to figure out whether market conditions fully justified the upward price rally.
The Ukrainian publication, European Pravda, partly attributed the recent price rise to the seasonality factor. Nearly 50% of eggs in Ukraine are produced at the individual farms of the citizens. Most of them cannot afford artificial lighting, so their productivity is tightly linked to the number of daylight hours and declines in autumn.
“This means there is nothing unusual about the rise in prices on the egg market during autumn. The only question is about its scale,” the publication said.
Ukrainian market participants describe the current market situation as a perfect storm. The Ukraine union of poultry producers estimated that the country lost nearly 20% of production capacities in the egg segment. Some farms were destroyed during the Russian invasion, while others are located in temporarily occupied territories.
At least 3 industrial egg farms are known to curtail operation. In 2021, the Kherson region produced 496 million eggs, Zhaporozhie 229 million units and Donetsk 329 million units. All these regions suffered tremendous destruction due to Russian aggression. In addition, even farmers located far away from active hostilities have limited their production performance this year, citing low confidence in the future.
On the other hand, the Ukrainian union of poultry producers forecasts a decline in egg prices on the domestic market.
“The current price level for eggs will not last more than a month. And, somewhere in November, prices will gradually begin to decline,” said Sergey Karpenko, chairman of the union.
According to Karpenko, Ukrainian poultry farms are growing new batches of laying hens, which will soon reach productivity. In addition, the sharp rise in egg prices prompted farmers in central and western Ukraine to invest in capacity expansion.