Market Update – March 4th, 2022
Unfortunately, the unforeseen events within Ukraine have drastically affected a broad range of economic sectors and markets. We are working closely with our suppliers to gather the information and detail around the areas and industries most affected so we can convey the key products at risk to our customers.
Please see below a summary of the immediate impacts that we are already experiencing in certain markets along with a future market outlook subject to the duration of the conflict:
The poultry market in Europe is yet to recover from COVID labour shortages and Avian Flu outbreaks and when the conflict in Ukraine started the market was affected again. Ukraine is a significant contributor to the European poultry market. There are multiple reports that, within many key Ukrainian factories, production has now ceased creating a major hole in our supplies.
Despite everything over the past 2 years, we have continued to work with a core base of trusted, suppliers in an attempt to maintain our supply to our customers. As we have done for the past 2 years, we are exploring all options to introduce new suppliers to our supply base. We are also looking at opportunities to source a secure stock of frozen backup poultry. However, despite this, we continue to see immediate price increases on EU chicken, reductions in product availability, price changes by delivery, and disproportionately affected products such as Supremes and skin-on products. As a result, we will be reviewing pricing weekly and will endeavour to keep all our customers as up to date as possible.
Animal Feed and Grain
Ukraine is the backbone of Europe in producing animal feed in vast quantities to export on a global scale. Corn, wheat, and Barley are most likely to be affected due to Ukraine being one of the largest global producers for EU supply.
Additionally, Russia is also a vast producer of grains globally. Currently we are uncertain of the full scale of economic sanctions and fall out with regards to Russian exports into the EU, this will also have a significant impact on the cost of production in the pork sector as these are all key crops for pig feed.
Gas and Oil
With Russia supplying 40% of European natural gas imports and prices soaring by nearly 30%. This will of course impact in terms of transport costs as well as electricity costs. It will heavily impact energy intensive products such as cardboard and plastic production resulting in increased packing costs indefinitely.
For all the above reasons we are going through a period of uncertainty and instability which will affect stock and prices. Whilst we aim to do the best that we can for you, our customers, we ask that you appreciate that we are all in the same position and governed by factors that are beyond our control. We thank you for your patience.
For any further information regarding stock or prices please don’t hesitate to contact your Area Sales Manager or the main office.