Ukraine's MHP agro holding boosts sales of chicken meat 22% in H1 2023, sunflower oil three-fold

MOSCOW. Sept 25 (Interfax) - Ukraine's MHP agricultural holding boosted sales of chicken meat 27% year-on-year to 178,120 tonnes in the second quarter of 2023, Ukrainian media reported, citing the company's report on the London Stock Exchange.

According to the report, the volume of export sales surged 46% to 100,230 tonnes in the reporting period, and domestic sales rose 8% to 77,890 tonnes, with the share of export sales reaching 56%, or 7 percentage points higher than in April-June last year.

Sales of chicken increased 22% year-on-year to 365,640 tonnes in January-June 2023. Domestic sales grew 8% mainly owing to higher demand. Export sales rose 34% to 212,170 tonnes amid the low comparative base in the first half of 2022.

MHP notes that export prices for poultry decreased 16% year-on-year in the second quarter of 2023, though prices increased 5% quarter-on-quarter. Prices on the domestic market grew 9% year-on-year in dollar terms in the quarter, and rose 8% quarter-on-quarter, owing to an increase in sales volumes of the high-margin fillet product.

The sales volume of sunflower oil totaled 168,680 tonnes in the second quarter, a surge of 3.5-fold year-on-year. Sales of the product increased 3-fold year-on-year to 245,880 tonnes in January-June 2023. Growth occurred mainly owing to additional processing capacity and changes in recipes, as well as owing to the partial restoration of logistics routes, the agro holding notes.

Sales of soybean oil totaled 13,630 tonnes in the second quarter, a surge of 48%, and they totaled 28,030 tonnes in the first half of the year, an increase of 43%.

"MHP is experiencing an acute shortage of storage capacity for vegetable oil, which currently accounts for only 50% of production. The lack of storage capacity has forced the company to increase exports. This is a serious problem, as it limits the company's ability to manage price cycles, which directly affects the profitability of vegetable oil production," according to the report.

Exports of vegetable oil have become less profitable owing to a substantial drop in international prices for vegetable oil, as well as expensive and labor-intensive logistics, MHP concluded.