Why did Poland want Ukrainian eggs and how will this affect prices?

This was told by the journalist Agravery.com.

The scandal with infected fipronil (a toxic chemical for insect control), eggs got to Poland - the country faced the most severe deficit of eggs since 2012 - in a few months they went up by a quarter, and on the shelves of the well-known in Poland chain stores "Lidl" and " Biedronka "in general there are no eggs.
The Polish authorities have already announced their intention to increase the export of eggs from Ukraine. True, only Yasensvit started selling them, and it will be enough for this Poles - it is still unknown.
Fipronil as an import catalyst

The summer scandal with the discovery of fipronil in eggs in a number of EU countries and the world significantly influenced the market - powerful poultry farms in Germany and the Netherlands were closed, the livestock was actively carved out. In general, infected with a dangerous substance, eggs were taken to 15 countries, including Hong Kong.

The egg market was also affected by problems related to avian influenza in Italy and the spread of salmonella. Deficit reacted prices - according to the European Commission for the past year the average cost of eggs in the EU rose by 53%, and amounted to 16 cents per egg.

Poland, which is the largest producer and exporter of eggs in the European Union, has not left aside the problem (9 billion eggs are produced annually, 43% of which are exported). In this country for several months in a row there is a shortage of this type of product.

It all began with the fact that at the end of August the press secretary of the Chief Sanitary Inspection of Poland, Jan Bondar, announced the discovery in the country of a party of 40 thousand eggs that could be infected with fipronil. It was noted that these were already peeled and cooked eggs, which were supposed to be used for the production of ready meals.

Eggs were sent for a detailed examination with a subsequent return to the German supplier. "Because of these problems with fipronil, the eggs in the country immediately jumped in price, on average now is more expensive by a quarter than a few months earlier - 6 zł per ten, or one and a half euro." In shops "Lidl" and "Biedronka" on shelves almost empty, "- tells the Agravery.com resident of Warsaw Katarzyna Wakovski.

The obvious choice
To cover the shortage and thereby stop the price increase, Poland began buying eggs in the eastern neighbors, including Ukraine. After the rise in price of Polish eggs, the cost of Ukrainian products looks very attractive, so it is advantageous for Poland to import our products at a price much lower for one euro per dozen. Moreover, in the middle of September of this year the first company from Ukraine was already certified for deliveries to the EU of eggs in the shell - the company "Ovostar Union" (TM "Yasensvit") .In early October this year, it carried out the first deliveries of products to Poland and other EU countries within the non-tariff quota.

In the company "Yasensvit" to comment on the actual volumes of supplies and plans for exporting products to Poland Agravery.com refused. According to the official report posted on the site of the enterprise, "Ovostar Union" for the results of the first nine months of 2017 increased the volume of egg exports by 47% to 350 million units. (2016 - 237 million Eggs). The share of exports in the total sales of eggs was 42%. In addition, the average sale price of eggs for the 9 months of 2017 increased by 8% compared to the same period in 2016, and amounted to 1.33 UAH per piece. According to information from open sources, now the company has about 8 million laying hens, which for 9 months in 2017 produced more than 1.2 billion eggs.

According to the general director Boris Belikov, the company's plans in the near future to increase the production of eggs to 2 billion pieces due to the increase in the number of chickens. From which we can conclude that the company has a chance to conquer not only the Polish, but also other European markets.

The rest of the businessmen will not be exporting their products to Poland or the EU - the press service of another powerful manufacturer of the Avangard Company assured that they do not plan to expand into the EU and, in particular, in Poland.

Use the odds
Well, the opinion of the general director of the Association of the Union of Poultry Breeders of Ukraine, Serhii Karpenko, the world "egg crisis" can fully be "at hand" to Ukrainian egg producers, and form a fashion for our eggs in the EU. "The first batch of eggs from Ukraine was supposed to become nothing more than an image promotion of the goods, but now they are needed by Europe, they have real demand, we are one of the countries that can satisfy it," says Serhii Karpenko.

Volodymyr Lapa, Chairman of the State Property Management Service of the Republic of Belarus, also positively regards the possibility of expanding the export horizons for Ukrainian goods: "The desire of Polish consumers to buy Ukrainian eggs only confirms the high quality and safety of domestic products." We hope that Ukrainian producers use market opportunities and help Poland solve the problem of egg shortage. "

He noted that there is no danger of hitting and infection with fipronil eggs in Ukraine. We have registered and used veterinary drugs containing fipronil, but only for the treatment of ectoparasites of cats and dogs. Fipronil in poultry farming is not used at all and cases of illegal use of its Ukraine are not registered.

Moreover, the decision of the State Service of Ukraine for Food Safety and Consumer Protection introduced temporary monitoring at Ukrainian enterprises producing egg and egg products for fipronil, both for the circulation of products on the domestic market and for export.

However, for the possible expansion of tariff quotas on the part of the EU, even in connection with the crisis of production, it is not said yet. In 2017, the volume of quotas for the supply of eggs in the EU was 1,800 tons (main) and 3,000 tons (in addition).

To date, only 658 tons (36.6%) of the main and 600 tons (20%) of additional quotas have been used. The quota for the supply of eggs for 2018 is 2,100 tons. Taking into account the increase in quotas, the issue of expanding the list of Ukrainian egg exporting enterprises to the EU countries is topical.

According to the analysis of the Association of Poultry Breeders of Ukraine, the price of eggs in September alone in the EU has increased by 20%. That is, potentially at a price that now exists for eggs in the EU countries, the supply of this product can be beneficial for our producers.

In general, according to the State Fiscal Service, Ukraine for January-September 2017 exported 62.4 thousand tons of eggs for $ 43.6 million. The volume of exports for the first 9 months of this year exceeded the result for all 2016 by 231% exported 50.7 thousand tons of eggs.

At the same time, in terms of the value measure over three quarters of 2017, Ukraine earned 4.2% less than in 2016 ($ 45.5 million). In the three major importers of Ukrainian eggs, there were no changes - this is traditionally the United Arab Emirates ($ 21.3 million), Iraq ($ 6.7 million) and Qatar ($ 3.7 million).

According to the State Service of Ukraine for Food Safety and Consumer Protection, certificates for the export of eggs to the State of Israel, the Republic of Iraq, and Hong Kong have been approved for today. Negotiations continue on the export of eggs and egg products from Ukraine to Montenegro, Qatar, Malaysia, Singapore, Vietnam, the Philippines, China. Requests have now been sent and answers are expected for egg export requirements from Ukraine to Mexico, Japan, Serbia, Bosnia and Herzegovina, Canada, South Africa.
Domestic prices are rising up
However, according to experts interviewed by Agravery.com, the potential increase in exports may be a catalyst for the growth of domestic prices. According to the State Statistics Service, weighted average prices for eggs from September 11 to October 10 in Ukraine have already increased by 13.45%, or by 2.4 UAH to 20.33 UAH per 10 pieces. The highest prices are observed in Kiev - 21.39 UAH per dozen, and the lowest - in Zaporizhzhia region - 19.35 UAH. According to Karpenko, the increase in the price of eggs is quite logical, how many from February to September, producers were forced to release them at prices well below cost. "The price situation this year was even worse than last year, selling prices in certain periods dropped to the level of 2014.

As we have repeatedly stated, for the Ukrainian egg market there are seasonal fluctuations, and, since September, this factor fully begins to act ", says the expert.
He explains that the situation with the rise in price of eggs in autumn is traditional, because in summer a significant part of the population receives eggs from their farms, so the demand is very low. Manufacturers at the same time sell products below cost.

"This year, the cost of egg production is 15-15.5 UAH per dozen, while poultry farms sold them for six UAH per ten in the summer. In the period from September to March, when the demand for eggs is growing, the producers, in order to reach the level of growth, at least 10 -15%, raise prices to the level that we have, " says Karpenko.

The expert notes that now the egg market is experiencing the same trend as the poultry meat market - the volume of exports exceeds the indicator of the previous year while maintaining production volumes.

Therefore, the most likely scenario for the forecast of the Union of Poultry Breeders of Ukraine - the price of eggs will grow by the end of the year, they will not cost less than 29-31 UAH  per dozen.