It is well-known that price on the market forms in the trade-off point of demand and supply. While in previous years pig producers in Ukraine were oriented exclusively for domestic consumers, but the last year the external demand was compensated by weaker appetites of Ukrainians. At the beginning of 2016 the situation has changed. The main consumer of Ukrainian pork — Russia — has abandoned goods and promotion of trading relations with EU and Canada, who are pork net exporters, bothers market players. You can read about Ukrainian pork trade in 2015 and prospects for current year in our research below.

Ukraine ends the second year in a row with positive balance of foreign trade on meat and edible by-products. In 2015 the external supplies value of this type of goods was $350.7 mln. It increased the balance of foreign trade of the country by $259 mln. Export of fresh, chilled and frozen pork wasn’t the smallest part of such achievements. It produced 15.6% of export revenue or 18% of foreign trade balance.

External pork trade had significantly unloaded domestic live pigs market (as well as mentioned achievement) and was a reason of good months for producers and helped to set off losses of the first quarter.

Active pork supplies to Russian Federation that were done last year by 12 traders supported the brisk demand on live pigs market. In view of logistic closeness of the main export destination to Ukraine, chilled carcasses and halves of pigs prevailed in commodity composition of external trade. So during the year it was bought out of Ukraine about 14.7 thsd tons of such products, it is 54% of total pork export. As for frozen pig carcasses and halves — about 9.34 thsd tons. Export of other boned pig cuts was 2.71 thsd tons.

However the ‘motorcade of generosity’ of our northern neighbor, who was the monopolistic buyer of Ukrainian pork, has finished. So the main question that bothers producers as well as processors is where to sell our pork this year.

Where to ship to?

During 2015 the State Veterinary and Phytosanitary Service was investigating about 30 countries toward the pork supplies. But Ukraine is ASF-positive, that’s why many doors are shut. But still there is a way out.

While pork export to China stays the remote prospect, there is a possibility to supply by ‘grey transit’ through Hong Kong and Viet Nam. In 2015 they were points of the end use for 2908.84 tons of pork by-products, produced in Ukraine. About 70% of this amount was delivered to Hong Kong and 870.54 tons to Viet Nam. This is 91.5% of total export of Ukrainian pork by-products of category ‘Other by-products’ (ears, , tails, snouts etc.).

Import prospects

Pork external trade is a double-ended weapon: when active export significantly warms up the price on market, imports or even gossips about foreign supplies are often used as anti-stimulating factor for price increase. At the present moment opening of the borders for European goods as well as import approval for Canadian pork is the cause for concern of Ukrainian producers.

1. What other markets are prospective for Ukrainian pork?
2. How is it real to supply our pork production to neighboring countries?
3. How justified are the concerns toward foreign pork import?
4. What are the prospects of import in 2016? What will be the domestic demand?
5. Who is a key pork supplier to Ukraine?
6. Will there be any tense from the part of European pork?
   
   

You can find answers for these and other questions in the full version of the article in the magazine «Profitable Pig Production», № 1 (31) 2016.