Ukraine’s giant egg producers Avangard and Ovostar Union have reported reduced revenue in 2016 as market sales fall.
Both companies cited the negative market conjuncture in Ukraine as the primary reason for the reduced profitability of the egg business.
Avangard reduced total revenue by a third year-on-year after three quarters of 2016 because of the 52 percent fall in domestic sales to 1.1 billion eggs and 42 percent drop in exports to 189 million eggs.
NataliyaVasiluk, Chief Executive Officer (CEO) of Avangard, said low purchasing power of local customers continues to be the main negative factor affecting the company’s profitability.
Over the same period, Ovostar reduced net profit by almost half to $12.219 million. The reduced profit took place despite egg production growing by 21 percent year-on-year.The price of eggs over the corresponding period is 12 percent lower than in 2015.
The immediate future doesn’t look good as well for Ukranian egg producers. On November 30, Ukraine experienced its first outbreak of avian influenza in eight years.
This led the European Union to completely ban imports of Ukranian poultry. Hong Kong also restricted import of eggs from the Khmelnitsky region where the outbreak was identified.
The United Arab Emirates, Iraq and Denmark may also restrict imports of Ukrainian eggs if the country fails to contain bird flu. Those three countries account for 70 percent of all eggs exported from Ukraine.