Prices are falling while inventories are rising: the imbalance in Ukraine’s oil market is intensifying
4 July 08:11
The imbalance between production and sales is intensifying in the Ukrainian butter market. Prices continue to fall, while the volume of unsold products in manufacturers’ warehouses is steadily increasing. This is reported by "Komersant Ukrainian", citing “Infagro.”
For consumers, this situation means greater access to promotional offers and cheaper butter, which could stimulate an increase in consumption. At the same time, it creates serious financial pressure for producers, as products are increasingly being sold at prices that do not cover costs.
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Despite the revival of domestic demand, this is not enough to balance the market. Butter production continues to grow, while exports have declined significantly. As a result, large volumes of product remain in warehouses awaiting an improvement in market conditions.
The accumulation of inventories continues to put downward pressure on prices, and long-term storage of products is becoming increasingly difficult for companies that lack sufficient financial resources. The situation is further complicated by falling prices in foreign markets, which make exports to most destinations economically unviable.
According to market participants, promotional campaigns remain the most effective tool for supporting sales at this time. That is why producers are increasingly moving away from selling oil in bulk to industrial buyers, instead packaging the product for retail or storing it in anticipation of a more favorable market situation.
Experts believe that conditions for a price recovery may emerge later this year, but no significant changes in the market are expected in the near future.
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