The lifting of European Union custom duties on Ukrainian goods led to a jump in poultry imports that mostly benefited one company, French poultry makers said, asking for the temporary move not to be renewed.
The EU in June lifted tariffs to help the war-torn country and suspended quotas of Ukrainian agricultural products, including one for 70,000 tonnes of Ukrainian poultry a year.
The measure is set to expire in June 2023.
Ukrainian chicken imports into the EU jumped 54% year-on-year in the second quarter to about 52,000 tonnes, French poultry industry group Anvol said on Wednesday, forecasting the total volume for 2022 at between 130,000 and 180,000 tonnes.
Third Largest Source
EU data shows Ukraine was the EU's third largest source of poultry imports, behind Brazil and Thailand, in the first six months of the year before restrictions were relaxed.
Imports of Ukrainian chicken into France, the European Union's second largest poultry producer, rose 181% in the second quarter, according to Anvol.
"We got tricked," Gilles Huttepain, deputy chairman, Anvol told reporters on Wednesday. "We are ok to help Ukrainian farmers but we don't want to help just one company."
Customs Exemption
The customs exemptions on Ukrainian goods are valid for one year but the European Commission has said it could reimpose duties if producers in the EU face serious difficulties.
The European Commission, which oversees EU trade policy, said on Friday Ukraine had requested an extension of full trade liberalisation until 2024, although no decision has been taken. It did not comment on a possible activation of a safeguard clause, as requested by French poultry producers.
Anvol's Huttepain was referring to a jump in imports from MHP, Ukraine's largest poultry meat producer and exporter and the country's top food producer.
In a statement to Reuters, MHP said the rise in exports to the EU was linked to the war in Ukraine that prevented it from accessing its traditional markets in the Middle East and Africa.
"It is crucial, that MHP and similar strategically important companies from Ukraine stay in business despite the extraordinary challenges and the destruction of war," John Rich, the executive chairman of MHP, said.
"That is the main reason that the tariffs were temporarily lifted in the EU."
Poultry Production Capacity
In June, MHP said its poultry production capacity had been reduced to 80-85% of normal levels due to the conflict and it could not give a financial outlook for the year.
In addition to cheaper produce from Ukraine, the demand for chicken imports in France has also risen due to a drop in local output after producers had to cull more than 19 million birds in the country's worse-ever bird flu crisis.
Chicken imports from Brazil into France were also up 122% in the second quarter, according to Anvol.
The competition from increased imports also comes as the sector is already suffering from a surge in costs due to high grain prices and rocketing energy prices.
News by Reuters, edited by Donna Ahern, Checkout. For more supply chain stories, click here. Click subscribe to sign up for the Checkout print edition.
