In Ukraine, prices have fallen eggs, but not for long – the experts

For three months of the poultry farm Ukraine sell eggs at a loss. This year the wholesale selling prices began to decline in March, reaching the lowest level at the beginning of may to 5.5 — 6 UAH per dozen, writes UBR.

“At the same time, the average production cost of a dozen eggs is 13 – 14 UAH. That is, for three months, manufacturers release their products much below cost”, — said General Director of “Union of poultry breeders of Ukraine” Sergey Karpenko.

According to him, the market for eggs is characteristic of relatively stable demand and seasonal fluctuations during the year. Usually the price of eggs reaches its peak in autumn and winter, when reduced production in households. Accordingly, the cheapest eggs are in the spring and summer.

Seasonal factors for the second year are added to the problems with exports. Although the situation has begun to improve, the manufacturers do not hide that in the fall will be forced to raise prices to cover the losses of the previous months.

According to state statistics, retail prices of eggs in January 2017 was 18.64 UAH/Dec., and in may — only 10.5 UAH/Dec. For example, in April, according to the Economic discussion club eggs fell by 19.7%, or by 4.58 UAH. Last month, the average monthly cost of a minimum consumer basket (IPC) for the able-bodied person amounted to 1364 UAH 85% of the subsistence level for this category of the population. And eggs were in it, the cheapest product is only 1.4% (or 18.7 UAH) of the total cost of the IPC.

Autumn egg producers will have to raise prices.

But what’s good for the consumer, not always at the hands of the manufacturer. So, the group of companies “Ovostar Union” (a major producer of eggs) in the first quarter of 2017 received 4.3 million dollars of net profit, which is 1.4 times less than in the same period of 2016.

The fall of profit in the company explain the low prices in the domestic market and the introduction of a number of countries, restrictions on the import of eggs from Ukraine due to cases of avian influenza recorded in the South-Western industrial countries in December 2016-January 2017

“In the summer production of eggs traditionally increases, including at the expense of households. And the people moved to the country, closer to home products. Eggs — the product is shelf stable without special requirements to the temperature regime, and fluctuations are not expected,” — said the Director of the Ukrainian Association of trade networks suppliers Oleksiy Doroshenko.

According to the “Union of poultry breeders of Ukraine”, the summer egg production in households increases the total supply of this product by 25-30%. “In summer, people traditionally consume more vegetables and fruits and less eggs. The cumulative impact of these factors leads to a significant decrease in prices”, — said Karpenko.

In summer, the Ukrainians go to the eggs

According to him, the forced reduction of the poultry population in the industrial sector (to minimize losses some poultry unscheduled scored the bird) and due to the increase in export supplies were able to decrease the supply of eggs on the domestic market. As a result, domestic wholesale prices increased to 11.5 – 12 UAH, which does not cover their cost, but significantly reduces the loss of production.

According to experts, the supply of eggs exported in periods of significant decline in prices on the domestic market give the opportunity to companies to reduce the losses. “However, it should be noted that to export its products are not more than a dozen producers,” — said the “Union of poultry breeders of Ukraine”.

Autumn prospects

However, this fall the situation could be repeated in 2016, when the price of eggs since October have risen sharply. In the beginning of last year because of lower exports during the month egg prices likewise dropped: by 50%, to 12 – 15 UAH per dozen 23 – 25 UAH/dozen in December 2015. Since the export of the eggs went to the domestic market.

Recall, the Ministry of agriculture of Israel in January 2016, the study revealed a subspecies of Salmonella Enteritidis in eggs imported from Ukraine, and took the decision to suspend imports of this product.

In fact, autumn can repeat last year’s situation. Producers will cut production to minimize losses, exports will grow at a seasonal reduction proposals.

As a result, last October, the price of eggs started to grow, reaching in December the record marks 23 to 25 UAH/dozen wholesale. Businesses raise prices to cover the losses they incurred during the 8 months of 2016. According to the “Union of poultry breeders of Ukraine”, in 2016 Ukraine exported eggs to more than 20 countries, mainly Middle East, Africa and the Caucasus.

Fall time rise in price of eggs

“In connection with outbreaks of bird flu in Ukraine in December last year, some countries imposed restrictions on the import of Ukrainian poultry products, including Iraq, the export of which last year amounted to 35%,” — said Sergey Karpenko.

Currently, Ukraine is free from the disease that allows you to restore exports to countries that have imposed restrictions. According to him, negotiations are underway to restore trade eggs with Israel. Therefore, there is a corresponding hope that the increase of export supply will enable manufacturers in the summer to sell their products at least at the level of cost.

According to GFS, in January-April 2017 Ukraine exported 4,34 tons of eggs, of 8.82% less than in March (4,76 kt). The main importers of Ukrainian eggs are UAE (by 8.98 million), Liberia (1.34 million dollars) and Sierra Leone (0.77 million dollars). The exports to these countries made up of 10.93 million tonnes, up 1.63 million tons and 0.94 million tonnes of eggs, respectively. For 2016, Ukraine has exported eggs for 45.5 million dollars, which is $ 32 million less than 2015 — 77,5 million dollars.