However, forecasts for the industry remain gloomy as the level of meat output this year is expected to decline following several years of steady growth.
In January-June 2015, Ukraine exported 14,680 tonnes (t) of pork, or 8.2 times more than during the same period in 2014, according to a report from the country’s State Statistics Service.
Data from Ukraine’s State Fiscal Service revealed that, in value terms, exports amounted to US$29.7m compare to $1.8m during the first half of 2014. Exports of poultry meat also increased by 9.8% year-on-year – to 75,830t or $103.4m.
Poultry imports amounted to 23,070t or $15.6m (substantially down due to the devaluation of the hryvnia at the end of last year). That was 6.2% more than in the first half of 2014, when it was 21,730t at a total value of $23.9m.
Pork imports for the period totalled 1,520t compared to 18,660t a year earlier. In value terms, during the first half of 2014 these amounted to $3.79m.
Production decreases
During the first half of 2015 Ukraine produced a total of 1.55 million tonnes (mt) of meat, 2.3% less than in the first half of 2014.
“The situation in the livestock industry during the first five months of this year, gives reason to forecast a further reduction in the country’s livestock and poultry numbers, as well as a decrease in the production of meat, milk, eggs and wool,” said Yuri Lupenko, director of the National Scientific Center ‘Institute of Agrarian Economics of Ukraine’.
“Although this trend mainly concerns households, it will also negatively affect the total volume of livestock production in 2015,” he added.
The Institute has forecast that meat production this year would amount to 3.1mt, which would be 3.7% less than last year. Pork production would amount to 1mt or 0.5% lower than in 2014. Poultry production would drop to 1.5mt or -5%, beef to 549,000t or -4.7% and lamb to 26,000t or -5%, it said.
Struggle for tax benefits
Meanwhile, meat manufacturers warn that the rate of decline in production may speed up in 2016 if the government does not abandon its intention to cancel tax benefits on VAT for meat companies - a condition imposed by the International Monetary Fund (IMF) in return for providing new loans to Ukraine’s state budget.
“In our view, the government’s position, which is dictated by the main creditor of Ukraine - the IMF - is disastrous for the industry and goes against our vision of further development of the national economy,” said Alexander Bakumenko, deputy chairman of the Committee on Agrarian Policy and Land Relations and head of the Union of Poultry Farmers of Ukraine.
Initial estimates from the Committee have indicated that abandoning tax benefits on VAT from 1 January 2016 would cost Ukraine’s agricultural industry $1bn-$1.5bn a year. Output is expected to drop by 10.6% in the industry next year, amid forecasts that 10% of all businesses could close and the amount of agricultural jobs would fall by 60,000-100,000.