Milk producers predict further price increases in the near future
11 October 2024 13:13
There is a steady upward trend in raw milk prices in Ukraine, which will continue in the near future. This is stated in the price monitoring by the Association of Milk Producers, according to "Komersant Ukrainian"
According to the Association of Milk Producers, as of 25 September 2024, the average purchase price of extra-quality milk reached UAH 16.34/kg excluding VAT, which is UAH 1.14 more than a month earlier. The average price for first-class milk was 14.67 UAH/kg excluding VAT, which is 70 kopecks more than in the second half of July.
Georgii Kukhaleishvili, an analyst at the Association, explains that several key factors contributed to the price increase. First of all, it is an active demand from dairy processing companies and a limited supply of raw milk on the domestic market. In addition, Ukrainian companies are actively increasing exports of finished products, taking advantage of high prices for commodities on foreign markets.
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The situation is further complicated by the fact that in the summer of 2024, Ukraine experienced a severe heat wave, and long-term power outages due to missile strikes on energy infrastructure facilities led to interruptions in the operation of ventilation systems at dairy farms. This had a negative impact on cow productivity and overall milk production.
Experts note that the highest price increase was for extra virgin milk, which is used in the production of export commodities. In August 2024, Ukraine exported 10.38 thousand tonnes of dairy products, up 13% compared to August 2023.
However, a further rise in prices for finished products may lead to a decrease in demand for dairy products among the population and a reduction in processing for the domestic market. In the first eight months of 2024, inflation for dairy products in Ukraine has already reached 17.6%.
Experts predict that starting from November 2024, the growth in purchase prices for raw milk may slow down due to seasonal factors and changes in the international market. However, by that time, prices may still rise due to an increase in fuel excise taxes, which will affect logistics costs.
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