September 14, 2017 / 10:09 AM / a year ago

Ukraine may curb meat exports to stabilize local prices

KIEV (Reuters) - Ukraine may impose substantial curbs on meat exports to stabilize local prices, which have jumped by more than 40 percent in some cases this year, a senior government official said on Thursday.

A man visits the meat department of a Metro cash and carry store in Kiev, Ukraine, August 17, 2016. REUTERS/Valentyn Ogirenko

Average domestic prices for pork surged 43 percent in the first eight months of the year, while beef and poultry were up 26 percent and 31 percent higher respectively, according to Ukraine’s state statistics service.

“We are facing a significant increase in local meat prices and a jump in exports is one of the reasons,” the official familiar with the matter told Reuters on condition of anonymity.

“We are considering substantial meat export restrictions to keep meat prices stable,” he said, without giving details.

The state statistics service said local prices for lard, a traditional Ukrainian food, had risen about 3 percent in the first 10 days of September alone, while beef and poultry prices were up 1.4 percent and 2 percent respectively.

Ukraine’s Prime Minister Volodymyr Groysman promised earlier this month to lower meat prices in the coming weeks.

The Ukrainian central bank has also said inflation is higher than expected in part due to “significant exports of meat and milk products”.

According to data provided by the agricultural producers lobby the Ukrainian Agrarian Council, Ukraine exported 228,418 tonnes of meat in the first eight months of 2017, nearly 30 percent higher than a year earlier.

“We’ve became hostage to exports. The price rises on the world market make it profitable to supply meat for foreign markets,” said Denys Marchuk, the council’s deputy head.

Producers’ data shows that poultry dominates the country’s meat exports, accounting for about 75 percent of the total volume. This year Ukraine exports poultry mostly to Egypt, the Netherlands, and Iraq.

Agriculture officials have said Ukraine’s meat consumption could reach 2.2 million tonnes this year with production at about 2.3 million tonnes. Poultry consumption is forecast at 1.06 million with production at 1.2 million tonnes.

“The net cost of our meat is much cheaper (than abroad) and this pushes exports up,” the government source said.

The ministry forecasts 2017 meat imports at 193,000 tonnes and exports at 305,000 tonnes, including 240,000 tonnes of poultry. Ukraine’s poultry exports rose 49 percent to 240,160 tonnes in 2016 while imports rose 36 percent to 83,300 tonnes.

Analysts have said that outbreaks of African swine fever in many Ukrainian regions have also reduced the pig population, which was another reason for the rise in prices.

Ukraine had registered 85 cases of swine fever in most regions as of mid-July. Producers have said the pig population could shrink by about 8 percent this year to 6.8 million, which could reduced pork meat production by some 3 percent.

Additional reporting by Natalia Zinets and Alessandra Prentice; editing by David Clarke

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