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Ovostar makes headway in shift to exports

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Shares in Ovostar Union rose after the Ukrainian egg producer unveiled headway in a strategy of boosting exports, and reducing its exposure to the difficult domestic market.

The group, which has 4.5m laying hens, said that its overall shell egg sales rose by 44% to 208m in the January-to-March quarter, backed by strong growth in output.

However, exports rose even faster, tripling to 44m eggs, with shipments of dry eggs also rising.

Exports now make up 21% of Ovostar's shell egg sales.

The data follow the company's announcement earlier this month of an increased emphasis on exports, political turmoil threatened domestic markets and devalued the domestic currency, the hryvnia, which has lost about half its value against the dollar over the past year.

"Serious devaluation"

Borys Bieliko, the Ovostar chief executive, said on Wednesday: "In the first quarter, the company has been operating in the context of a serious devaluation of the national currency.

"In this connection, additional volumes of our produce have been directed to export to increase foreign currency denominated revenue and secure stable results."

He added that "we plan to maintain this trend" of rising shipments.

Prices rise

In processing, Ovostar's focus on exports sapped the group's performance in liquid egg products, destined mainly for the domestic market, for which sales fell by 8% to 1,371 tonnes.

Sales of dry egg products rose by 9% to 461 tonnes, of which 53% was shipped abroad.

The extra exports, in the context of a devalued hryvnia, helped Ovostar double to 93.43 hryvnia per kilogramme its average sales price of dry egg product, while the selling price of liquid egg product rise by 50% to 23.88 hryvnia per kilogramme.

The average sales price of shell eggs rose 62% to 1.19 hryvnia per egg.

Ovostar's Warsaw-listed shares were up 4.7% in lunchtime deals, to 74.88 zloty.

By Agrimoney.com

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