Ukrmiaso forecast mass closure of meat processing companies in 2009

The Ukrmiaso national association of meat producers forecasts a mass closure of domestic meat processing companies in 2009 due to a lack of funds and raw materials, an association board member, Ivan Hrod, has told Interfax-Ukraine.

"We expect that by the end of the year, around 50% of companies will close," he said.

Hrod said that meat companies would face the acutest problem with raw materials in March 2009 due to the introduction of a 13% extra duty on imports of some goods, including on pork and beef.

"From March 5, when the law on the 13% extra duty comes into effect, meat processing companies would face a lack of materials. There is a large shortage of meat in Ukraine, especially beef," he said.

The association said that Ukraine's demand for imported meat this year is 600,000 tonnes, including 400,000 tonnes of pork and 200,000 tonnes of beef.

Hrod said that the extra duty along with the growing dollar exchange rate would make it unprofitable to legally import meat to Ukraine. The expert did not rule out an increase of meat smuggling to the country.