Business news from Ukraine

Ukraine to introduce quota for poultry exports to EU

The Ukrainian government has introduced a quota for exports of poultry and poultry by-products to the EU in the amount of about 137,000 tons starting July 1.

According to Cabinet of Ministers Resolution No. 612 of May 30, published on the government portal, the quota for the supply of poultry meat and edible offal to the EU, including chickens, geese, ducks, guinea fowl (UKTZED code 0207), is set at 133.28 thousand tons, and turkey meat and edible offal (UKTZED code 0207 24-27) at 3.76 thousand tons.

The Ministry of Economy will consider applications for licenses to export these goods to the EU within 10 days. Permits will be issued on the basis of applications and approvals provided by the Ministry of Agrarian Policy.

For the period of martial law, applicants shall prepare and submit documents electronically through the relevant information and communication systems (the Ministry of Economy’s electronic services portal, the Unified State Web Portal of Electronic Services).

The licensing regime for the export of quota goods to the EU is also mandatory if the non-resident counterparty is registered in the EU under a foreign economic agreement (contract).

At the same time, the volume of quotas approved for the commodity item “Meat and edible offal of poultry: poultry chickens, ducks, geese, guinea fowl”, excluding the reserve quota of 1400 tons for new exporters, and for the commodity “Turkey meat and edible offal of turkeys” is distributed by the Ministry of Agrarian Policy among exporters in proportion to the actual volume of their exports to the EU in the first quarter of 2024. Information on the actual export volumes of these products for the first quarter of 2024 must be provided by exporters to the Ministry of Agrarian Policy with supporting documents by June 25, 2024.

The reserve quota of 1400 tons will be distributed among exporters who did not export these products in the first quarter of 2024.

If there is an unused balance of the quota as of November 1, 2024, it is distributed among exporters in proportion to the actual exports of these products to the Member States of the European Union for the three quarters of 2024.

As reported, on May 13, the EU Council finally approved the extension of the autonomous trade measures for another 12 months – until June 5, 2025. At the same time, restrictions have been imposed on the duty-free supply of a number of agricultural products – poultry, eggs, sugar, oats, cereals, corn and honey – in the amount of the average export volume for the period from the second half of 2021 to the end of 2023.

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Number of pigs in Ukraine increased by 3%, poultry – by 2.2%

The number of pigs in Ukraine in 2024 in all categories of farms increased by 3%, and poultry – by 2.2%, said Olena Dadus, head of the Livestock and Breeding Department of the Agrarian Development Department of the Ministry of Agrarian Policy, at the MeatForum industry conference.

“Domestic livestock producers almost completely supply the domestic food market and its processing component. Last year, meat consumption in Ukraine per capita amounted to 54.7 kg, while the minimum requirement is 52 kg. The consumption forecast for 2024 is 53.9 kg, due to a decrease in beef consumption. However, there will be an increase in public demand for pork and poultry as the most affordable types of meat,” she said in a statement by the press service of the Ministry of Agrarian Policy and Food.

It is noted that in 2023, poultry production in Ukraine increased by 5.8% compared to last year, and that this segment is the one that meets export demand for Ukrainian products. Pork and beef production declined slightly, and its pace slowed significantly.

According to the agency, due to the increase in domestic meat production, the total volume of meat imports decreased. Ukraine imported meat products from Poland, Spain, France, the Netherlands, Denmark, Hungary, and Canada.

At the same time, there was an increase in meat exports. The Netherlands, Saudi Arabia, Slovakia, China, Azerbaijan, the United Kingdom, and Georgia were the most frequent buyers of Ukrainian products.


MHP Agro Holding invests in poultry development in Saudi Arabia

MHP, Ukraine’s largest chicken producer, has signed a shareholder agreement to establish a joint venture with Desert Hills Veterinary Services Company Limited (DHV), a subsidiary of Tanmiah Food Company, a leading supplier of poultry and other meat products in the Middle East listed on the Saudi stock market.

“This partnership will allow DHV and MHP to join forces to invest over SAR 200 million (about $53 million at current exchange rates) in farms with a capacity of over 1 million parent flocks, which are expected to produce around 175 million hatching eggs per year, in a state-of-the-art hatchery and poultry feed mill,” MHP said in a statement to the London Stock Exchange on Friday.

Building on the foundation laid by the Memorandum of Understanding signed earlier this year, DHV will hold a 55% stake and MHP will hold a 45% stake in the joint venture.

According to the agroholding, this year MHP and DHV signed a memorandum of understanding to cement their partnership to join forces to develop farms with a capacity of more than 1 million birds, which will produce about 175 million hatching eggs annually. A modern poultry hatchery and feed mill will also be built in Saudi Arabia.

“The deepening of our alliance with Tanmia is a strategic turning point in MHP’s global reach. This partnership symbolizes our shared vision of integrating international expertise with local knowledge and ensuring that Saudi Arabia achieves its food security goals. Our collective strengths will catalyze transformational achievements in the poultry sector, driving innovation and setting new standards of excellence,” said John Rich, MHP Executive Chairman.

“Our collaboration with MHP means more than just a partnership; it reflects our commitment to strengthening Saudi Arabia’s food security system. By leveraging our local knowledge combined with global best practices, our portfolio of first-class products, services and solutions demonstrates our commitment (…) to the broader goals of Vision 2030,” said Zulfiqar Hamadani, CEO of Tanmiah Food Company (a subsidiary of DHV).

According to the report, the signing of the shareholders’ agreement is a crucial step in the establishment of the joint venture after obtaining the necessary approvals, including the permission of the General Authority for Competition of Saudi Arabia and other relevant jurisdictions.

The signing ceremony was attended by Sheikh Amr Al-Dabbagh, Chairman of the Board of Tanmiah Food Company (a subsidiary of DHV), as well as members of the Board and executive management of the company, representatives of the Saudi government, and Ambassador of Ukraine to Saudi Arabia Anatoliy Petrenko. MHP’s Board was represented by Executive Chairman John Rich and Managing Director Yevgeny Levterov.

Tanmiah Food Company is a leading supplier of poultry and other meat products in the Middle East, listed on the Saudi stock market. The company was founded in 1962. Its business model combines enterprises in agriculture, primary processing and marketing of products sold in Saudi Arabia, the UAE, Bahrain, Oman, Jordan and Kuwait. Tanmiah Food Company is the main franchisee of Popeyes Louisiana Kitchen.

As of June 30, 2023, Tanmiah operates 114 farms, as well as six hatcheries, two feed mills and four primary processing plants (slaughterhouses). It sells its products through a network of wholesalers, retailers and food outlets, as well as through its e-commerce platform.

MHP is the largest producer of chicken in Ukraine. It also produces grain, sunflower oil, and processed meat products. MHP supplies chilled chicken half-carcasses to the European market, which are processed, in particular, at its facilities in the Netherlands and Slovakia. In February 2019, the holding completed the acquisition of the Slovenian company Perutnina Ptuj.

In 2021, MHP earned $393 million in consolidated net profit against a net loss of $133 million in 2020, while its revenue increased by 25% to $2.37 billion. In the first nine months of 2022, the agricultural group reported a net loss of $269 million, compared to a profit of $377 million in January-September 2021, and its revenue increased by 14% to $1.88 billion.

In the first quarter of 2023, MHP’s revenue increased by 34.7% compared to the first quarter of 2022 to $745.60 million, and net profit amounted to $49.07 million compared to $108.25 million (at the same time, exchange rate gain amounted to $4.18 million compared to exchange rate loss of $95.32 million).

MHP’s founder, majority shareholder and chairman of the board is Ukrainian businessman Yuriy Kosyuk.

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Europe may return quotas on poultry, eggs and frozen fruit from Ukraine

The European Commission is studying the situation on the poultry, egg and frozen fruit markets and is ready to return to tariff quotas if Ukraine maintains the current scale of their supplies to Europe, EU Agriculture Commissioner Janusz Wojciechowski said.
During the session of parliamentary committee on agriculture, which took place on Monday, he said that at the moment there is no reason to prohibit import of any other goods, except wheat, corn, rapeseed and sunflower, from Ukraine to Bulgaria, Poland, Romania, Hungary and Slovakia. These goods are also allowed to transit the territory of these five countries, reports
According to Wojciechowski, market inspections, according to the current legal regime, will end in November, and according to the updated rules, if the procedure begins in June, they will end in September.
“The situation in the poultry market is not only local, but European-wide, and it is very likely that if imports do continue on this scale in the current months, there will be a return to the tariff quotas that were in place before liberalization,” he said.
As the commissioner said, the EC is monitoring the situation in the egg market. There is an increase in imports, and this is also covered by the excessive import procedure. “If this procedure shows excessive imports, there will be quotas or an import ban,” he added.
According to Wojciechowski, imports of frozen fruit from Ukraine to the EU reached 44,000 tons in 2022, an increase of 18.9 percent from 37,000 tons in 2021.
“This situation will be controlled. If during the season it becomes clear that there is a threat to Polish, European producers, the European Commission is ready to impose restrictions even in an emergency, express mode. It depends on the situation during the season, how the situation will develop in the coming months,” he stressed.
According to the Commissioner, since April 2022 until the end of March 2023, Ukraine exported 48 million tons of wheat, corn, rapeseed and sunflower seeds, 24 million tons of which were sent to Africa and Asia, about 24 million tons – to the EU countries, 10.3 million tons of which – to the five frontline countries.
Voytsekhovskyy specified that 4.1 million tons of Ukrainian grain arrived in Poland, of which 3.3 million tons remained in the country, and 700 tons were in transit.
The largest transit country, through which the Ukrainian grain passed, was Romania, through which 9 million tons passed, of which 2.5 million tons remained in the country.
As Voytsekhovskyy stated, there was no uncontrolled import of grain from Ukraine to the EU. Because of the growing problem in the frontline countries, a temporary import ban was imposed on Bulgaria, Poland, Romania, Hungary and Slovakia. “Existing restrictions are ‘likely’ to be extended,” wrote the Polish publication.
The European Commissioner recalled that free trade with Ukraine is very beneficial to the Polish economy. In 2022, almost 10 billion euros of goods were exported from Poland to Ukraine, and less than 6 billion zlotys (EUR 1.254 billion) were imported. At the same time, he noted that this is 1/3 of all EU exports, the value of which was EUR30 billion. In second place is Germany with exports of EUR4 billion.
“If someone asked me why I am in favor of liberalization of trade with Ukraine, it is only because not only political but also economic reasons demanded it,” the Polish edition quoted the European commissioner as saying.

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Ukrainian producers received right to export poultry to Canada and fish products to Turkey

Ukrainian producers in December 2022 got the right to export poultry and poultry products to Canada and fish products to Turkey, the website of the State Service of Ukraine for Food Safety and Consumer Protection (Derzhsprodpotrebbezopasluzhba) said on Wednesday.
According to her, the new markets for business are open thanks to the joint work of the department, the Ukrainian Ministry of Foreign Affairs and foreign embassies.
The relevant work to open the Canadian market for Ukrainian poultry meat and meat products began back in 2019, when representatives of the Canadian certification body CFIA conducted an inspection of the state production control system at Ukrainian enterprises. A list of Ukrainian companies that are now allowed to export poultry meat and poultry products to Canada has been added to the CFIA database, and requirements for importing meat products from Ukraine to Canada have been published on the organization’s official web portal.
According to the Service, in December Ukraine also received the right to export fish products to Turkey for export. The form of the relevant certificate has already been posted on the official web portal of the State Service of Ukraine for the Protection of Consumer Rights.
As reported, during the martial law in Ukraine has increased the number of enterprises-producers of products of animal origin, which have the right to export their products to the European Union. Their number increased by 33 (or 8.5%) compared with winter 2021 – up to 418 from 385. The number of Ukrainian exporters of dairy products increased the most – by 11, fish products – by six, snails and products from them – by five.

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The cancellation by the UK of all duties and quotas on products from Ukraine to support it in the face of a military invasion by the Russian Federation may allow Ukrainian farmers to increase their presence in the UK markets of poultry meat, walnuts, honey, cranberries, blueberries and peas.
The list of high-margin agricultural products that Ukraine could supply to the UK at a time when the export of its traditional agricultural raw materials is blocked by the aggressor country of the Russian Federation was published on the website of the Ukrainian Agribusiness Club (UCAB) on Wednesday evening.
According to the results of 2021, agricultural products worth $553 million were exported from Ukraine to the UK, including sunflower oil (31% of export earnings), rapeseed (28%) and corn (24%). However, the supply of traditional agricultural crops in 2022 is difficult due to the naval blockade of Ukraine by Russian warships, as a result of which the country can potentially increase the export of a number of other agricultural products by road.
Ukrainian farmers, in particular, can focus their export efforts on the supply of poultry meat to the UK. The volume of its export in 2021 was 2,600 tonnes. The share of Ukraine of UK imports is 1%. Main competitors: the Netherlands, Poland, and Belgium.
The export of walnuts without shells is also promising. The volume of its export in 2021 was 0700 tonnes. The share of Ukraine of UK imports is 6%. Main competitors: the United States, Germany, and China.
According to the UCAB, Ukrainian farmers can increase honey exports to the UK (800 tonnes were delivered in 2021). The share of Ukraine of UK imports is 1%. Main competitors: China, Poland, and Mexico.
The export of cranberries and blueberries is also promising (supplies in 2021 – 200 tonnes). The share of Ukraine of UK imports is 0.3%. Main competitors: Spain, Peru, and Chile.
Ukraine exported 4,900 tonnes of peas to the UK in 2021, which amounted to 12% of the UK market in 2021. At the same time, Russia is Ukraine’s main competitor in this market, which, taking into account the economic sanctions imposed against it, adds an advantage to Ukrainian suppliers.
“Now the railways and seaports of neighboring countries are heavily loaded due to the export of grain crops, the volumes of which we have the largest. Therefore, to increase export earnings, we should focus on the export of goods that have a higher price with less weight and thus export by road,” UCAB cites a promising export model from its analyst Svitlana Lytvyn.

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