October 21, 2013

MHP to become Ukraine's first poultry meat exporter to EU

Ukraine's largest poultry producer, MHP, may soon become the first local meat-exporting company to the EU as sales of chicken to the region are expected to commence in November 2013.

An important milestone for Ukrainian agricultural companies, the development opens a potentially large new market for their products. It also provides an alternative market to the Customs Union led by Russia, which opposes Ukraine's association with the EU and has restricted some Ukrainian exports.

European Commission formally allowed imports of Ukrainian poultry, eggs and other products to the EU, opening the market for Ukraine's top agricultural holdings, such as London-listed MHP and Avangard, and the unlisted Agromars. Over the last years, the largest poultry producers of the country has been struggling to initiate the first shipments.

Avangard and Ovostar could now increased their egg processing capacities, while MHP is considering acquisition of a meat processing plant in the EU for a short to medium term, according to Ukraine analysts.

Previously, Ukraine's Ministry of Agriculture and Food forecast that local poultry producers would be able to supply the EU market with 20,000 tonnes of poultry in 2013. While this figure is currently not achievable, Ukraine will be able to sell 40,000 tonnes of poultry to the EU yearly, starting from 2014, once the Association Agreement with the EU is signed, said the ministry.