8 September 2022

3 minute read

By: Global Ag Media

The lifting of European Union custom duties on Ukrainian goods led to a jump in poultry imports that has benefited a single company rather than Ukrainian farmers, reported Reuters, citing French poultry makers on Wednesday, asking for the temporary move not to be renewed.

The EU in June temporarily lifted tariffs to help the war-torn country and suspended quotas of Ukrainian agricultural products, including one for 70,000 tonnes of Ukrainian poultry a year.

Ukrainian chicken imports into the EU jumped 54% year-on-year in the second quarter to about 52,000 tonnes, French poultry group Anvol said on Wednesday, forecasting the total volume for 2022 at between 130,000 and 180,000 tonnes.

In France alone the rise in the second quarter was 181%.

The competition from increased imports comes as the sector is already suffering from a surge in costs due to high grain prices and rocketing energy prices.

"We got tricked," Anvol Deputy Chairman Gilles Huttepain told reporters. "We are ok to help Ukrainian farmers but we don't want to help just one company."

Huttepain was referring to MHP, by far Ukraine's largest poultry meat producer and exporter and the country's top food producer.

MHP's operations are vertically integrated - from feed grains and fodder production to egg hatching, processing and sales, it says on its website.

In June, the chicken and grains processor said its poultry production capacity had been reduced to 80-85% of normal levels due to the conflict and it could not give a financial outlook for the year.

The rise of Ukrainian chicken exports to the EU was also linked to a fall in shipments towards the Middle East due to stalled maritime traffic on the Black Sea, the French group said.

Chicken imports in France have been boosted further by a drop in local output after producers had to cull more than 19 million birds in the country's worse-ever bird flu crisis and strong competition from cheaper origins. Imports from Brazil were 122% higher in the second quarter, they said.

An Ukrainian chicken breast is sold at nearly half the price of a French one, Anvol said.

EU customs exemptions on Ukrainian goods are only valid for one year and the European Commission said it reserved the right to further impose duties in the event of injury to the products of European producers.

Dr John Rich, the executive chairman of MHP said in response:

“MHP is the largest poultry producer in Ukraine and its largest EU certified poultry exporter. The Company is also a vital part of the Ukrainian war effort, supplying the Ukrainiandefenders at cost, and donates food at scale to civilian population in the frontline regions as well as to the relocated people across all regions of Ukraine in cooperation with local authorities. It is crucial, that MHP and similar strategically important companies from Ukrainestay in business despite the extraordinary challenges and the destruction of war, and that is the main reason that the tariffs were temporarily lifted in the EU.”

“Since 2013, MHP has been exporting to the EU and now has over 80 poultry export destinations in its portfolio (MENA, EU, Africa, CIS and Asia). Since Russian invasion in Feb 2022, taking into account significant logistics difficulties, unavailability of ports infrastructure for exports to the MENA region and Africa, it was decided that the majority of poultry exports (transshipments) will be done through the territory of the EU using ports of Klaipeda, Gdansk and Constanta. As of today, thanks to these possible, but substantially expensive and longer routes, MHP continues to serve customers in all locations.”