Ukrainian pork market sees slight increase

Market participants expect that the total market size for 2016 will be 802,000 if projections for November and December will be realised. In that case the size of the market will have grown by 5.9% year-on-year.

More money, more to spend

In the report, Alexandra Bondarskaya, PPA analyst, explained that the projected increase in the last 2 months of 2016 farmers is related to an expected additional consumption of 3% by customers, primarily due to the holiday season. Generally people spend more money on meat during those days.

Bondarskaya added that the PPA forecasts are based on studies of consulting agency GFK. They noted some improvement in the purchasing power of Ukraine’s population and a decrease in inflation expectations. In general, Bondarskaya said, these factors should contribute to an increase of pork consumption.

She warned, however, that the optimism as voiced by GFK experts could be fragile. Reasons quoted were e.g. a rise of housing costs and the devaluation of the hryvnia, Ukraine’s currency, in November.

Hardest year in decade

Speaking at a press conference in Kiev, Artur Loza, the head of PPA, described 2016 had been the hardest year for Ukrainian pig farmers in the recent decade. In particular the first half of 2016 market conditions were bad, but they have improved slightly since the middle of the year. He added that as a consequence, the total pig inventory dropped by nearly 300,000 head, compared to 2015.

He said that prior to the current crisis Ukraine accounted for 1 million tonnes of domestic pork consumption. In 2014 and 2015 overall pork consumption in Ukraine fell 22%. In recent months, Loza added, prices for pork in Ukraine have risen by nearly 10%. This has slightly improved the business’ profitability.