The Ukrainian egg market, after nearly two years of shortages, is now grappling with an oversupply issue. This shift has significant implications for both local producers and international markets.
Background and current situation
In recent years, Ukraine’s egg market experienced a severe shortage, prompting many farmers to increase their production capacities. As a result, the country is now producing over 100 million eggs per month. Despite record-breaking exports, the market is struggling to balance supply and demand. Yevhen Khailov, sales director of Incuba, a local egg manufacturer, highlighted that the surplus is evident even with the increased exports.
Factors contributing to oversupply
Several factors have contributed to this oversupply. Firstly, many farmers expanded their production capabilities to address the previous shortages. However, this rapid increase in production has now led to an excess of eggs in the market. Additionally, the poultry meat market is also saturated, limiting farmers’ ability to reduce their laying hen populations. Long power outages further complicate the situation, making it difficult for farms to slaughter birds and store meat.
Export dynamics
Despite the oversupply, Ukrainian egg exports have continued to rise. In the first half of 2024, exports reached 36,980 tonnes, up from 29,700 tonnes in the previous year. The largest importers of Ukrainian eggs include European countries such as Poland and Italy, as well as Singapore, the UAE, and Israel. However, this increase in exports has not been sufficient to offset the domestic oversupply.
Market implications
The oversupply has several implications for the Ukrainian egg market. Firstly, it could lead to a decrease in egg prices domestically, which might affect the profitability of local farmers. On the other hand, the surplus could push Ukrainian farmers to further increase their exports. However, this strategy faces challenges as European farmers have raised concerns about overwhelming imports from Ukraine. For instance, Latvia has seen its egg imports from Ukraine nearly quadruple in recent years.
Future outlook
Looking ahead, the Ukrainian egg market may face further challenges. Egg prices in Ukraine are expected to surge over the next few months due to extended blackouts during the heating season. DTEK, the country’s largest power generation company, has estimated that power outages could last up to 20 hours per day, exacerbating the difficulties faced by egg producers.
In conclusion, while the Ukrainian egg market has successfully ramped up production to address previous shortages, it now faces the challenge of managing an oversupply. Balancing domestic supply and demand, along with navigating the complexities of international trade, will be crucial for the market’s stability in the coming months.
Sources: Available upon request.