Milk purchase prices have fallen in Ukraine: what to expect next
29 April 06:17
The price of milk continues to decline on the Ukrainian market due to a decrease in demand in the domestic market. This is reported by the press service of the Association of Milk Producers, "Komersant Ukrainian" reports
Current situation on the milk market
According to Georgi Kukhaleishvili, an analyst at the Association of Milk Producers, the average purchase price of extra-grade milk as of April 23 was 16.15 UAH/kg excluding VAT, which is 20 kopecks less than a month ago. The price range ranges from 15.50-16.50 UAH/kg.
Other milk categories show similar dynamics:
- Premium milk averaged 15.95 UAH/kg excluding VAT (down 20 kopecks).
- First grade – 15.60 UAH/kg excluding VAT (down 5 kopecks).
The weighted average price of the three grades amounted to 16.00 UAH/kg excluding VAT, which is 15 kopecks less than in the previous period.
According to Mr. Kukhaleishvili, prices have stabilized: compared to the first half of April, price ranges remained unchanged, and slight decreases occurred only within the market due to a surplus of raw milk.
According to him, there are risks of further price declines. Thus, the main reasons that can provoke a price drop are:
- reduction in the supply of milk powder and cheese products;
- introduction of protectionist measures in export markets;
- spread of foot-and-mouth disease.
What to expect from milk prices
Surplus of milk and increased imports
Amid a surplus of raw milk, the domestic market is facing a serious challenge – a sharp increase in imports of dairy products, especially cheese. Currently, the share of imported cheese on Ukrainian shelves is almost 50%. This situation threatens the survival of domestic cheese producers and may lead to a reduction in the number of cattle.
The threat of foot-and-mouth disease
Another serious risk is the outbreak of foot-and-mouth disease in Slovakia and Hungary. If the infection gets to Ukraine, it could result in
- a sharp decline in raw milk prices due to export restrictions,
- introduction of quarantine measures,
- economic losses for milk producers.
To prevent the spread of foot-and-mouth disease, it is important to strengthen biosecurity on dairy farms.
Potential opportunities
If foot-and-mouth disease spreads to other countries in Central and Eastern Europe and their exports are restricted, Ukrainian producers may take advantage of the opportunity to increase dairy exports to international markets.
