Ukrainian poultry and grain giant faces ‘complex challenges and disruptions’ amid Kremlin’s war

MHP SE, the parent company of a major international poultry and grain producer based in Ukraine, announced it is experiencing “complex challenges and disruptions” following the Russia-Ukraine war.

The company suffered an 11 per cent decline in poultry production from 63,735 tonnes to 63,735 tonnes in June 2022 compared to a year ago and an 18 per cent drop in sales volume of third party tonnes from 67,688 tonnes to 55,676 tonnes.

“Since the beginning of the Russian war in Ukraine, the Company has been facing complex challenges and disruptions, which, primarily, resulted in a decrease in capacity utilisation of poultry production,” the company said.

Export share sales also dropped 9 per cent in June 2022 from June 2021, to 54 per cent compared to 66 per cent.

“The Company has been extensively developing alternative routes to resume and continue exports,” it said today. “Export of all proteins from Ukraine continues to be extremely challenging and requires 24/7 attention and management.”

Meat processing products and Convenience Food sales volume also plunged 46 per cent from 4,503 tonnes to 2,421 tonnes. 

However, agricultural crop sales have seen a significant rise. Sunflower oil sales volumes surged 120 per cent to 22,544 third parties tonnes in June this year compared to 10,228 third parties tonnes in June last year with soybeans oil sales volumes up 15 per cent from 3,519 to 4045 third parties tonnes.

Winter crops harvesting including wheat, barley, and rapeseeds is also going according to schedule.

Russia and Ukraine, two major global commodity producers, have been engaged in conflict since February this year, sending commodity prices soaring around the world.

Moscow had blockaded southern ports of Snake Island, a Ukrainian Black Sea outpost, to stop commodities like grain and fuel being exported, in an effort to put pressure on Ukraine’s economy. It has also tried to stop food being imported, which is causing shortages. Ukraine recaptured it last month. 

Kyiv and Moscow will reportedly sign a deal facilitated by Turkey today to allow the export of grain through Ukraine’s Black Sea ports. Ukraine is one of the world’s biggest exporters of grain and Russia has curtailed its export since the start of the war in February, putting pressure on the global economy.