July 16, 2014
Ukraine-based MHP poultry production and exports up in H1
Ukraine-based agro-industrial company, MHP S.A., reported poultry production volume of 132,350 tonnes in the second quarter of 2014, a 9% increase on-year; and a 20% increase on-year to 268,880 tonnes in the first half of 2014.
The increase was a result of the company operating at full capacity and benefitting from higher volumes from its Vinnytsia poultry farm. Currently 10 out of 12 of its production sites at the Vinnytsia complex are operational at full capacity and more sites will be added during the second half of 2014.
As a result of an overall increase in poultry production volumes during the second quarter of 2014, the sales volume of chicken meat to external consumers increased to 139,720 tonnes, which is 23% higher on-year. During the first six months of 2014, third parties sales amounted to 251,990 tonnes of poultry, which is 23% higher than in H1 2013.
Domestic demand for chicken meat remained strong and MHP's domestic sales volumes in Q2 2014 increased by more than 30% on-year.
During the second quarter of 2014, the volume of chicken meat export totalled 27,190 tonnes, slightly below Q2 2013. MHP's export to the Custom Union (the Russian Federation, Belarus and Kazakhstan) in Q2 2014 was naught as a result of the Custom Union export ban introduced at the beginning of February 2014. MHP peaked in export volumes to the Custom Union in Q2 2013 when approximately 20,000 tonnes were exported to the Russian Federation and Kazakhstan.
However, MHP successfully managed to redirect most export volumes to the Middle East, Northern Africa and some CIS countries, diversifying export markets. Consequently, during the first half of 2014, poultry export sales increased by 4% and reached 57,560 tonnes. MHP continues to explore new business opportunities in the countries of Asia, Middle East and Africa building-up the export volumes of chicken meat in those regions.
Since October 2013 MHP has started exporting chicken meat to the European Union countries and since June 2014, it continues exporting poultry with zero import duty, gradually increasing volumes.
Through the second quarter of 2014 the average chicken meat price (both domestic and export) constituted UAH17.85 per 1 kg of adjusted weight (excluding VAT), an increase of 14% compared to Q1 2014 and 10% on-year. H1 2014 average chicken meat price was UAH 16.86, which is 4% higher on-year. The increase in poultry prices is mostly related to the increase of domestic price by 4% in Q2 2014 on-year and positive influence of Ukrainian hryvnia devaluation due to its US dollars-denominated export prices.
In the second quarter of 2014, sausage and cooked meat sales volumes slightly decreased by 5% to 8,316 tonnes compared to 8,770 tonnes in the second quarter of 2013. In the first half of 2014, sausage and cooked meat sales volumes decreased by 6% to 15,172 tonnes compared to 16,110 tonnes in H1 2013.
Average sausage and cooked meat prices during the second quarter of 2014 increased by 14.5% to UAH 26.50 per kg excluding VAT (Q2 2013: UAH 23.14 per kg). In H1 2014, average prices increased by 11% from UAH 22.86 per kg excluding VAT to UAH 25.40 per kg excluding VAT.