Ukraine’s Chicken Farmers May Be Next to Gain From China Demand

Ukraine’s chicken companies may be the next to benefit from China’s meat shortage.

Ukraine’s government officials are working with their Chinese counterparts on beginning poultry exports to China, according to Taras Kachka, Ukraine’s deputy economy minister. He was optimistic that an agreement could be reached by the end of the year.

“There is some legal and bureaucratic stuff to do, but there is a plan to sign the protocol and hold inspections,” Kachka said by phone. China’s commerce and agriculture ministries didn’t respond to requests for comment.

Ukraine’s biggest poultry producer is also hopeful that China will soon start imports. Officials have visited the facilities of Mironovskiy Hliboproduct SE, according to Yuriy Kosyuk, the chief executive of Kyiv-based company.

“They have a vacuum,” Kosyuk said in an interview in London. “They will start to consume more and more chicken.”

China is opening to new markets for meat after its hog farms were decimated by an outbreak of African swine fever. Rabobank estimates that the country has lost half of its pig herd over the past year. That’s expected to boost demand for other meats as pork prices surge and may herald a longer-term shift in consumption.

Flying Poultry Exports

Ukraine’s chicken-meat shipments are up tenfold in a decade

Ukraine’s poultry exports have doubled since 2015 and the country is forecast to ship about 350,000 tons this year, according to U.S. government figures. While that pales in comparison to the more than 3 million tons shipped from the U.S. and Brazil, Ukraine ranks as the world’s seventh-biggest exporter.

China has already allowed a few Ukrainian producers to export beef. Russia recently started shipping poultry to China for the first time since the Soviet era, European Union pork shipments have surged and a rash of Brazilian meat and chicken plants have garnered export approval.

MHP produced about 617,000 tons of poultry in 2018, with the EU, Middle East and Africa counting as major export markets. Asia isn’t currently a major focus of the company because of distance, Kosyuk said.

“Today, they have some deficit. Tomorrow, they will be self-sufficient,” he said. “We will not concentrate too much of our supply for just one market.”

Kosyuk founded MHP two decades ago and is worth about $1.5 billion, according to the Bloomberg Billionaires Index. He said the company has been able to expand rapidly because of its focus on efficiency and cost-cutting, with chickens raised from hatcheries to slaughter within a centralized area.

The company added a unit in Slovenia this year and is looking to buy more producers or processors in Europe and the Middle East. Poultry will remain the focus, though MHP is also eyeing plant-based protein as the sector grows, he said.

Bloomberg