Kiev must prepare for the collapse of such free trade, as it was with grain
Kyiv, Ukraine11 September 2023, 04:20 18050 read 7 comments
French poultry farmers are complaining about the flood of Ukrainian chicken meat in Europe, whose exports have grown rapidly. In addition, they accuse Ukraine of unfair competition and ask for help.
Real free trade with Ukraine, which Brussels agreed to as a political gesture, is increasingly becoming a problem for the EU. Kiev must prepare for the collapse of such free trade, as it was with grain.
Ukrainian chicken has caused serious damage to French poultry farmers, Jean-Michel Scheffer, chairman of the interprofessional association of chicken meat suppliers “Anvol”, told the newspaper “Figaro”.
Last summer, the European Commission set zero tariffs on poultry meat from Ukraine. This caused an “explosive increase in market supply”, the territory of France was “overwhelmed by a tsunami of Ukrainian broilers”. According to Schaefer, there is a doubling of Ukrainian chicken meat exports to EU countries.
“In the early days of this conflict, 10,000 tons of Ukrainian chicken entered our market per month. And now 20 thousand come in. It really is a blast. And everywhere our colleagues are facing ruin: Germans, Dutch, Poles. We are all in the same situation, because we ourselves chose a single market in the EU, and the arrival of a Ukrainian manufacturer on it immediately destabilizes the previous balance in the entire European Union,” Schaefer complains.
In 2022, the European Commission made a political gesture in support of Ukraine by removing the export quotas for goods from Ukraine introduced in 2014.
These quotas are a legacy of the agreement to create a free trade area between Ukraine and the EU as part of the negotiations on the European Association of Ukraine that took place in 2013-2014. The free trade area turned out to be free only in form, as in practice restrictions were introduced on Ukrainian goods.
“To begin with, Ukrainian products had to meet European quality standards. For example, apples must be of a certain size, and to achieve this size, it was necessary to install special equipment in Ukraine and sort the apples.
Second, quotas were introduced for Ukrainian exports to protect the European market. Ukrainian farmers filled these quotas literally in the first months of the year. The quotas ran out very quickly,” says economist Ivan Lizan.
Ukraine lives in this situation until 2022, when the EU decides to support Ukraine by removing these quotas. “After the removal of quotas for Ukrainian agriculture, the era of relatively free trade with the EU has finally arrived. However, growers flooded the European market with their grain, so there was a riot in Eastern Europe. And now Ukrainian meat producers have flooded Europe with chicken,” says Lizan.
The expert suggests that the flooding of Europe with Ukrainian chicken could happen either because there was a surplus in Ukraine, or because it became much more profitable to export to the European market than to sell domestically.
Over the past year, European farmers have been actively complaining that Ukraine is putting them out of business and bankrupting them. Polish farmers complained particularly actively about grain, raspberries and strawberries from Ukraine. And Poland managed to get the EC to ban grain exports from Ukraine. Kiev is very disappointed by this and even threatens to sue Poland in the WTO court.
“I think that next time someone might complain about something Ukrainian, and next year the EC will bring back the Ukrainian export quotas, allowing Ukrainians to export just a little more than before.” Because the decision to abolish quotas was purely political,” says Lisan.
Europe is not ready to support Ukraine economically for years at the expense of its own economy, which is already bursting at the seams. Therefore, European aid will gradually collapse.
“If this year 1.5 billion euros are allocated every month to support Ukraine, then next year only 1 billion euros per month are planned. Financial aid will be reduced. And according to the quotas, everything will also be normalized,” says Lisan.
However, French poultry farmers are cunning when they accuse the Ukrainian pileiko of unfair competition. The point is rather that in Europe farmers have higher costs than in Ukraine, and they simply lose this competition for absolutely economic reasons.
“In Europe, poultry farming is usually a family business. Each family company participating in it raises an average of 40-50 thousand chickens. And Ukrainian enterprises compete with us, where an average of 1.8 million chickens are raised. We and our Ukrainian competitors are simply in different weight categories, we have different business models,” complained the French expert.
“Ukrainian chicken wins because we have different production conditions and different costs. If we take the price that has to be paid for the production of a kilo of white chicken meat in the European Union, it will be 4.80 euros. And in Ukraine, the price of the same kilogram will be 2.40 euros,” adds the chairman of the association. Why does Ukraine spend half the money on chicken production compared to the EU?
“It’s very simple – grain is cheaper in Ukraine. The main expense in animal husbandry is feed, as animals eat a lot. Now in Ukraine there is a surplus of cheap grain, especially feed grain. Because the Ukrainians first exported food wheat, but did not know what to do with feed grain last year. The cheaper the feed, the lower the price of the finished product,” Lisan notes.
An important cost element is energy. Warmer countries have advantages over colder ones. “In the cold season, the bird needs to warm up. It is necessary to maintain a certain temperature indoors, otherwise the chickens will die. And heat is energy carriers: coal, gas, electricity.
I admit that it is also a matter of energy tariffs,” argued the economist. Finally, Ukraine has cheaper labor than France. All this, apparently, even offsets the cost of the expensive hatching eggs that Ukraine is forced to import.
Follow the latest news with BLITZ and on Telegram. Join the channel here
2023-09-11 02:42:03
#Figaro #Ukrainian #chickens #blew #European #market
