Dairy products in Ukraine may become 20–25% more expensive due to rising production, processing, and logistics costs, as well as losses incurred by retail chains after losing distribution centers as a result of Russian strikes, according to a forecast by the Association of Milk Producers (AMP).
“Disruptions in supply chains and rising costs of production, processing, and logistics are creating the conditions for higher prices for dairy products in Ukraine,” the statement notes.
According to the association, as of the end of August, the average price of pasteurized milk with a fat content of up to 2.6% in a plastic film package was 50.55 UAH/kg, which is 3.7% higher than a month earlier and 11.2% higher than last year. The price of pasteurized milk in plastic bottles rose by 2.1% over the month, to 68.44 UAH/kg.
The average price of Ukrainian-produced butter with a fat content of 72.5–73% was 591.45 UAH/kg, down 0.1% over the month but still 2% higher than last year. At the same time, the APM does not expect butter prices to fall in early fall: there are fewer low-price offers on the domestic market, and the lower limit of the price range has effectively stabilized.
According to the APM’s assessment, demand for dairy products is weak and is even deteriorating due to low consumer purchasing power, consumers being forced to leave the country, and disrupted supply chains from processing plants to supermarkets as a result of Russian strikes on distribution centers.
“Traditionally, dairy processing plants supplied finished products to a retail chain’s distribution center, and from there, they were delivered by truck to supermarkets. Currently, this chain has been severed,” notes the APM.
According to the association’s forecast, retail chains will attempt to pass on the losses incurred due to the loss of distribution centers to consumers. In the APM’s view, this could lead to a decline in dairy consumption.
As previously reported, in early August, the APM predicted a 5–10% increase in dairy product prices by the end of summer and during the fall and winter. At that time, the association attributed the potential price hike to rising costs for diesel fuel, electricity, packaging materials, and logistics, as well as to exchange rate fluctuations.
Source: https://avm-ua.org/uk/post/cini-na-molocni-produkti-divlatsa-vgoru
