Animal Farming Needs Subsidies in Oversupplied Meat Market - Bakhmatyuk
Businessman Oleg Bakhmatyuk, owner of one of the largest Ukrainian agricultural holding companies, said that the pandemic and the global economic crisis have resulted in losses in livestock production and that the state should play a role in overcoming the negative consequences of the crisis for the industry
The owner of Ukrlandfarming agricultural group said this in an interview with UNIAN. When asked about the impact of the pandemic on the agricultural sector in general and which sectors are suffering the most, the businessman
noted that the most affected were processors — pork, poultry, eggs, and beef producers. In addition, 2020 was the worst year in terms of harvest volume in the last 5-7 years, "so it was a difficult year for farmers, those people who farm the land. But now, due to global inflation and the growing demand for commodities, primarily from China and Asia, they may be at zero or even a small plus. But the situation for processors is much worse, as demand is falling, foreign markets are closing, and additional investments are needed. Accordingly, livestock producers are forced to raise prices. But the population is not getting richer. Therefore, the processing companies will definitely make losses, perhaps even go bankrupt," the businessman believes.
In his opinion, the world will have a surplus of poultry, pork, beef and eggs. "If you look at the analysis of Radabank, which is one of the strongest analysts in the agricultural sector, it foresees a crisis in poultry and pork production (including due to the fact that China has begun to restore its own pork production, which is a subsidised activity in China). Therefore, we must try to preserve the remaining capacities as much as possible," says Oleg Bakhmatyuk. — "We have already lost cattle.
There is almost no industrial production, which requires large capital investments and state support, which, unfortunately, is not available. And this is very bad, because the opportunities for creating added value, which we have discussed, are being destroyed. That is why the role of the state as a regulator and moderator in foreign markets is very important now."
The businessman believes that the Middle East and North Africa are promising markets for Ukrainian agricultural products, where Ukraine
already occupies one of the leading positions, and Asian markets are extremely promising. "Now, you know, a free economic zone has been created between twenty major countries — China, Japan, South Korea, Malaysia, Indonesia, Singapore, Vietnam, the Philippines, Australia, New Zealand. They occupy thirty per cent of the global economy, with 2.2 billion people living there. This economic zone will definitely be our main market in terms of size. And this is a market not only for raw materials, but also for economic opportunities. What kind of Ukrainian products can they be interested in? What opportunities should our country use? Now it is only the grain group, the oil group and, of course, ore. In the future, it will be chicken meat, eggs, pork, beef — those products that I am currently targeting," the businessman said.
"Ukrlandfarming is one of the country's largest agricultural groups engaged in the cultivation of grains and oilseeds, seed production, livestock farming, and production of eggs and egg products (Avangardco IPL). The companies of the group operate in more than 600 settlements in 22 regions of Ukraine and are among the largest taxpayers in Ukraine.
Recently, the agricultural group announced the forced closure of 37 of its facilities and the layoffs of 13,000 employees as a result of a pressure campaignon the company by NABU.
