In the medium term, the company aims to double the volume of its supplies to export markets, raising them to 500,000 (t) and thereby becoming one of the largest poultry exporters in the world.
“Despite protective measures, tariffs and quotas, we will export [poultry] to Europe, and they cannot hide [their market] behind a fence. We know how to do that, how to get there; we are already doing it,” he stated.
Kosyuk also believes that certain points of the free trade zone (FTZ) agreement with the EU are not fair when it comes to poultry supplies.
“In terms of Ukraine food exports, the EU has set very stringent quotas. Ukraine produces 1.2 million tonnes of chicken meat per year. Yet Europe has given Ukraine a duty-free quota of just 16,000t,” he said.
Kosyuk explained that, in addition to chilled chicken, Ukraine manufacturers can supply 20,000t of frozen chicken duty-free to the EU, but that, above the quota, all deliveries are subject to a fee of €1,000 per tonne.
Strongest growth
In 2015, MHP saw its strongest growth yet for poultry exports to the EU market. According to an official report from the company, last year these jumped by 65% on a year-on-year basis. Exports amounted to 27,285t to 17 European countries. Also last year, MHP started delivering chilled poultry to the EU for the first time.
The Ukraine poultry giant has aimed to increase exports to the EU, given the problems faced by the post-Soviet Union countries. According to the company’s press service, last year Ukraine’s overall volumes of poultry exports fell by 6% compared with 2014 to 132,080t, primarily due to problems in Uzbekistan, Georgia, Kyrgyzstan and Kazakhstan.
MHP’s statement of intent to export poultry to the EU above the quota levels is connected to the fact that, during January alone, Ukraine’s poultry industry had already reached 100% of its 2016 quota, according to a report from the country’s Cabinet of Ministers on 1 February. This means that, this year, all further deliveries can only be above the quota.
Ukraine experts believe that MHP and other poultry companies should not rely on the EU market, as the quota is unlikely to be raised substantially within the next few years.
“They [Ukraine poultry companies] should not rely on the EU as a poultry buyer. In the best-case scenario, the quota could increase by 20,000t, but that does not change the situation radically. For Ukraine it is important to develop exports of poultry meat to other countries that are ready to buy Ukrainian products without cumbersome certification procedures and, most importantly, in large volumes,” commented local agricultural analyst Alexandr Pak.