One of the main reasons for the rise in prices for eggs is the pressure of NABU on one of the major producers
As reported by Ukrainian news, the recent hike in the price of eggs in Ukraine has been brought on by three factors, one of which is the pressure mounted by NABU on one of the country’s top egg producers, the Avangard holding company, owned by the businessman Oleg Bakhmatyuk.
The increase in egg prices we’ve seen across retail networks has been caused by at least three factors. That’s according to the chief editor of the web portal AgroPolit.com, Natalia Belousova, who spoke to the TV channel OdesaLive. She cited three reasons behind the increase, one global and two domestic ones.
A global driver pushing the price of food up, including staple foods, such as meat, sugar and sunflower oil, is a global decline in grain crop that’s causing, in its turn, the price of animal feed to go up for animal breeders. Here’s how it’s gone on in Ukraine: several animal farming associations have stated on three separate occasions that a shortfall in grain crop has triggered a 75-80% increase in grain prices causing animal feed for pigs and poultry to grow by 45-50%. The share of feed in the cost of animal products is 65-70% on average, hence the increased cost of production. This is the first factor and we are in no unique situation from this perspective as a country, we are in this together with the rest of the world, she explains.
On top of that, however, Natalia Belousova also names two domestic factors behind the increased egg prices. The first one is an increase in the minimum wage and energy costs, she explains, as a component of the general cost of egg production and consequently of egg prices. The second domestic factor is the situation surrounding Ukraine’s largest egg producer, the company Avangard, whose owner, the founder of Ukrlandfarming, Oleg Bakhmatyuk, has an open conflict with NABU, affecting its operations and resulting in the closing down of egg farms, the laying off of workers and a reduction in output, causing the company’s supply of eggs to shrink for objective reasons during the year.
What’s that factor? It is the legal conflict that has been dragging on between that company and NABU for nearly eighteen months. What we’ve seen is that the conflict has stripped the largest egg producer of its ability to function normally and get access to credit. To date, the company has closed down 7 of its egg farms and laid off 3,500 employees. This situation is indeed quite delicate: the largest egg producer has won several cases but NABU holds on to its own position. This whole situation remaining uncertain is causing Avangard to cut down production capacity, it’s shrunk by 25% in the last year, she explains. According to her, those three factors have to a greater or lesser extent caused the egg prices to rise.
Just as a reminder, the owner of the agricultural company, Oleg Bakhmatyuk, has stated earlier that the main reason for NABU’s attacks against his companies is a personal vendetta by NABU Director Artem Sytnyk, who has been found guilty of corruption and listed in the official register of corrupt officials of the National Corruption Prevention Agency. The prime witness for the prosecution in the case was an advisor to Oleg Bakhmatyuk’s sister.