News: A joint venture agreement has been signed for the establishment of a new grain terminal in Odessa, Ukraine, reports Food Business Review. The agreement was reached between France-based diversified conglomerate Louis Dreyfus and Ukraine-based port operator and freight company Brooklyn Kiev, and is scheduled to begin the first phase of operations in 2013. The terminal will have a total storage capacity of 240,000 tonnes of grain once the project is finalised.
BMI View: We continue to favour Ukraine's grain sector and expect growth opportunities for production and more diversity in export demand. While the EU has recently authorised imports of the country's poultry, which will support export growth over the medium term, we do not see a similar opening for dairy exports in the near term and therefore see weaker growth coming strictly from domestic demand. We have revised down our outlook for real GDP growth for the country in the near term and believe this will particularly impact on demand for meat and dairy products, as they tend to be considered less of a staple food than grains. We highlight MHP's strong growth potential as the main beneficiary of our positive outlook for the local poultry industry.