The situation on the butter market remains unstable following a recent price increase that has not established itself as a long-term trend, according to the industry analytical agency Infagro.
Analysts emphasized that prices in the European market have dropped significantly over the past few weeks. They attribute this trend to an oversupply driven by active production, as well as the influence of the skim milk powder market, where prices remain high. As a result, inventories are building up, which is putting additional downward pressure on prices.
“In the absence of positive signals from the European market, industry participants anticipate further price adjustments both for export markets and domestically. This scenario is supported by rising production and the accumulation of unsold product volumes,” the experts noted.
According to their estimates, butter production volumes in Ukraine are showing growth compared to last year. At the same time, export activity does not exhibit similar dynamics. The high cost of dry milk remains an additional incentive for producers, partially offsetting losses from the decline in butter prices.
Infagro forecasts that butter and other dairy production volumes in Ukraine will grow in the near future. Excess supply will force producers to lower prices, leading to further market instability.
