PoultryWorld: Ovostar Union curbs production as Ukraine’s egg demand plummets

In the first half of 2022, Ovostar Union had to downsize its laying hens flock in order to reduce production, owing to low demand for processed egg products on the domestic market, the company said in a statement.

On 30 June 2022, Ovostar Union’s total flock was 6.26 million hens, including 6.18 million laying hens, compared to 8.01 and 6.63 million hens, respectively, as of the same date of the previous year.

Borys Bielikov, CEO of Ovostar Union, was quoted as saying that in response to the shrinking local demand, the laying flock was reduced, which led to a 4% decrease in egg output.

“On the background of the ongoing Russian military invasion, Ovostar Union made steps to adjust its operation to the challenging business environment,” he said.

In the first half of 2022, egg production stood at 794 million, 4% lower compared with the same period of the previous year. The sales totalled 541 million, against 540 million in the first half of 2021.

“The volume of shell eggs sales, however, remained on the level of the previous year, while the share of the processed eggs went down,” he added.

Export sales of shell eggs dropped to 128 million from 144 million in the previous year, resulting in a decline in export share of sales to 24% from 27% in the last year.

The average price of eggs decreased by 2% year-on-year to US$0.076 per egg, Ovostar Union estimated.

Output decline in the processing segment

The company said the volume of eggs processed in the first half of 2022 fell by 18% and totalled 216 million. Ovostar Union produced 1,420 tonnes of dry egg products and 4,745 tonnes of liquid egg products, compared to 1,619 tonnes and 6,680 tonnes, respectively, in the first half of the previous year.

The volume of dry egg products sold amounted to 773 tonnes, against 1,622 tonnes in the first half of 2021, out of which 425 tonnes, or 55%, were exported. The volume of liquid egg products sold was 4,547 tonnes compared to 6,713 tonnes in the corresponding period of the previous year, out of which export sales equalled 1,857 tonnes or 41%.

Ovostar Union maintained its export sales, both in shell egg and egg products segments, to offset the negative effects caused by the local market instability. Under the circumstances, Belikov said that the management is content with the operational performance for the first 6 months of the year.