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Russian invasion of Ukraine threatens US poultry exports

The U.S. exports more than $130 million worth of poultry and poultry products annually to Central Asian nations and other nearby countries like Armenia and Georgia, but all of that trade is threatened by the Russian invasion into Ukraine.

Poultry carcasses hang from hooks
Poultry processing
Courtesy / Agri-Pulse Communications

The U.S. exports more than $130 million worth of poultry and poultry products annually to Central Asian nations and other nearby countries like Armenia and Georgia, but all of that trade is threatened by the Russian invasion into Ukraine.

Ships loaded with U.S. poultry need access to the Georgian port of Poti on the Black Sea to reach an expanding list of overseas customers, says Jim Sumner, president of the U.S. Poultry and Egg Export Council.

It’s unclear how much longer Poti will stay operational, but Sumner stresses how important that will be.

“For the sake of residents in this area who are dependent on US poultry, it is increasingly important that they continue to have access to our product,” he said. “It’s important to us that we continue to get access to Poti for our markets that we serve in Central Asia.”

All reliable foreign markets for U.S. poultry, whether in the Middle East, Asia or even Cuba, are very important to U.S. producers that depend on their ability to export.

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Regarding Poti, Sumner said, “So far, so good,” adding he has had conversations this week with ocean carrier companies that said they are still servicing Poti even as they have stopped going to other Black Sea ports like the one in Odessa that closed because of the invasion.

But even if the port in Poti remains open, another obstacle tied to the invasion is threatening U.S. chicken exports. The value of the Russian ruble is dropping fast, dragging down currencies in Central Asian nations, many of which ditched the ruble for their own currencies after the breakup of the Soviet Union.

“We're not sure how they’re going to be able to pay for the product,” Sumner said.

Still, the Russian invasion of Ukraine could provide some new business opportunities for U.S. poultry exporters. Ukraine is an exporter of poultry to the Middle East and elsewhere, and the shutdown of that trade is leaving a supply gap.

The Ukrainian company MHP, which has three broiler factories, 15 distribution centers, exports to buyers in 85 countries and supplies about half of Ukraine’s domestic demand, says it is no longer exporting.

“MHP, like all Ukrainian companies, has encountered significant difficulties with its supply chain. Ukrainian roads are currently dangerous, especially in the active zones,” Executive Chairman John Rich said in a statement posted to the company website on Feb. 27. “There have been highly reliable reports that military vehicles are shooting without any regard for civilian lives, even at trucks of food supplies vital for the survival of Ukrainian women and children. Many trade channels have ceased operation due to the threat from Russian forces.”

Rich went on to vow that the company will continue operations to help feed Ukrainians but won’t be shipping product out of the country.

MHP, he said, is “pledging unconditional and free deliveries to all our valiant defenders as well as hospitals, communities and all who are facing difficult conditions where it is even remotely in the company's power to deliver. Needless to say, because of the damaged supply routes, the company is currently unable to export any Ukrainian produce. Inevitably, this is causing the company to incur significant unplanned losses.”

Related Topics: UKRAINEPOULTRYAGRICULTURE
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