Power outages are a common problem for producers, processors of pork and retailers and consumers, which has become one of the priorities since October, reports “ProAgro Group” with reference to the information of the Association of Pig Producers of Ukraine.
The ASU noted that emergency and planned power outages directly affect both the price situation in the pork market and the very format of its operators.
“For a month now, processors have been facing refusals of pre-ordered chilled pork, postponement of deliveries and forced revision of production schedules and/or shipment of finished products. In this regard, in mid-October, many operators had significant transitional balances of products and their returns, so in response to this, processors reduced the volume of harvesting and the workload of slaughterhouses by at least 20-30%. The corresponding changes in demand significantly affected the planned sale of commodity batches of pork producers, which increased pressure on prices against the background of seasonally active growth of live weight of animals,” the association stated.
In particular, since the second decade of October, power outages have intensified the seasonal subsidence of prices for the purchase of slaughter pigs: if during the second week of October the average price for pork live weight was 73.9 UAH/kg, then in four weeks the figure fell to 61.7 UAH/kg (-16.5%).
However, price fluctuations are not the only changes observed by market operators, because energy costs are growing. Thus, the cost of a kilowatt of electricity received from a diesel generator is two to three times higher than the standard one. But both producers and processors are forced to incur such costs, as long-term power outages lead to greater production losses and higher production costs.
