Ukrainian government demands domestic stability

20-04-2020 | | |
Farms across the Ukraine are ramping up production to meet national and international demand. Photo Robert Bodde
Farms across the Ukraine are ramping up production to meet national and international demand. Photo Robert Bodde

The Ukrainian Anti-monopoly Committee has issued a fervent plea to poultry producer MHP, stressing that the agricultural holding should not jeopardise stability of the domestic broiler meat market amidst the continuing Covid-19 pandemic.

The Covid-19 could disrupt supply chains in the food industry, especially in the countries with high dependence on imports, the Anti-monopoly Committee said. This could prompt some companies to boost exports to the overseas market, rushing for extra margins.“The consequences of such actions could include a shortage of some products on the domestic market of Ukraine, increasing consumer prices and even jeopardising the national food security,” the Anti-monopoly Committee warned.

According to the Anti-monopoly Committee there is no alternative for MHP production on the domestic poultry meat market. MHP is responsible for 45% to 55% production of the total domestic broiler meat market in Ukraine between 2016 and 2018, the Anti-monopoly Committee estimated.

MHP itself estimated that the demand for poultry had increased by 20% on the domestic market of Ukraine since the beginning of the coronavirus quarantine. MHP has not raised its price for its products since the company is a socially responsible producer, MHP said. In 2018, research done by Ukraine’s Institute of Agrarian Economics, showed that a strong focus on poultry exports had been causing sharp price fluctuations on the domestic broiler meat market. As a consequence, the retail price of broiler meat in Ukraine jumped by 31.3% in 2017 compared to the previous year, the research showed.

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Unreasonable attention

In an official response to the Anti-monopoly Committee MHP said there were “no grounds for such attention on the company”. “MHP is not reducing production and has no plans to limit output to the domestic market,” MHP said, adding that the company has embarked on additional safety measures and ramping up production on all farms to maximal production performance. “MHP is realising the situation in the Ukraine and beyond is tense. We are one of those who feed a third of the world,” MHP said. “The companies like MHP are currently preventing the national economy from sliding into an abyss,” the company added.

MHP poultry exports

MHP increased chicken meat exports by 25% in 2019 year-on-year, to 357,400 tonnes, the company reported earlier. The company exports poultry to 80 countries. MHP chicken meat exports accounted for about 53% of total sales in 2019, compared to 48% in 2018. In total, the company produced about 728,900 tonnes of poultry last year, 18% up as compared to the previous year. Annual sales of chicken meat grew by 13%, to almost 670,000 tonnes.

Vladislav Vorotnikov Eastern European correspondent