Russia’s war against Ukraine has substantially affected global meat industry

Russia’s war against Ukraine has substantially affected global meat industry

In 2021, Gira forecast that Ukrainian #poultry and #pig #meat consumption would maintain its upwards trajectory until at least 2026. However, russia’s war against Ukraine has led to renewed market turbulence. Due to the blockade of Ukrainian ports, exporting meat and #meat #products by sea is impossible. The export via EU countries is also difficult because of the EU veterinary restrictions. 

➖ Before russia’s invasion in late February, Ukraine had 2.6 million #livestock, 1.6 million of which were cows. The Ukrainian Agribusiness Club (UCAB) states that due to the war, about 15% of cattle have been lost. This is already influencing local beef production and dairy sector.

➖ The pig industry in Ukraine is distributed fairly evenly throughout the country. Before the war, there were 5.6 million pigs, and pork production was 750,000 tons. The number of pigs has now dropped by 20%. 

➖ The biggest meat market in Ukraine is poultry. Ukraine is the eighth largest exporter of poultry meat globally, accounting for 2.2% of global meat trade. Now Ukraine poultry companies report major losses caused by the russian invasion and direct attacks on poultry production assets and warehouses. Not only will local consumers be unable to afford Ukraine’s meat products, but there will be significant supply chain disruptions in the Ukrainian meat production cycle due to damaged infrastructure, lacking inputs (feed, labour, energy), insufficient funds, possible crop storage losses due to hostilities. The Middle-East and Sub-Saharan African countries will suffer most from Ukrainian poultry global shortage.  

➖ FAO Meat Price Index reached a new record high in April 2022 due to a steep increase in pork, chicken, and beef prices worldwide. Poultry costs were affected by disruptions to exports from Ukraine and rising avian influenza outbreaks in Europe.  

➖ Mintec analysts report chicken prices in the EU reaching a record high level of up 19% y-o-y in mid-February 2022. The russian invasion of Ukraine has already caused a price hike in the Estonian poultry market. 

➖ Overall, foreign experts agree that feed deficit may add upward pressure to EU poultry prices as feed accounts for 55-65% of the production cost. Ukraine is a massive producer and exporter of oilseeds, corn and grain, specifically wheat. Record-high global fertiliser prices suggest that Ukrainian farmers will apply less in the 2022 growing season and lower yields seem inevitable at higher costs. 

📌 On top of that, global consumer disposable income is being squeezed by the widespread rising inflation and the result is that consumers will down-trade their meat choices, and ultimately eat less meat. 

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