Business news from Ukraine

Power outage in Ukraine halted milk processing industry – analyst

25 November , 2022  

Russian missile strikes on Ukraine have left the country’s dairy industry without electricity, resulting in the shutdown of enterprises and disrupted mechanism of product sales, so spot prices for milk in this period can be considered tentative.
As dairy industry analyst Maxim Fasteev said in his Telegram channel, the massive rocket attacks on Ukraine once again show how important the factor of generators availability at the enterprises is now, and this factor will be relevant in the coming months as well.
“Some Ukrainian plants, as well as the population, were left without electricity for almost a day, milk trucks, in some cases, are still waiting for unloading of raw milk (it is good that at least the air temperature helps to preserve the quality of the goods). There is no possibility to resell raw milk, because all processors are in the same conditions. This is all the consequences of another wave of missile strikes of the terrorist country (already officially) on the Ukrainian civil infrastructure,” the expert wrote.
According to his data, milk processing companies continue to meet their obligations on the levels of procurement prices, but in the secondary market is not an issue of value now, because demand for the product is completely absent. Thus, the current spot price of raw milk in Ukraine can be considered conditional.
“Ukrainian exchange commodity prices in the domestic market remain under pressure from lower export (European) quotes, but there are no changes in the skimmed milk powder (SOM)/oil equivalent compared to last week due to the moderate strengthening of the hryvnia against the euro,” the analyst specified in the report.
In addition, last week the spot price of Ukrainian raw milk compared to the EU products was by 38% lower, while during the previous week this indicator was 34%, and the difference of milk equivalents (EM) of REM / butter was 21% (in the previous week -23%).
The expert reminded that the indicator of milk equivalent (EM) – recalculation of the current (spot) cost of dairy commodities in the equivalent of a basic kilogram of raw milk, taking into account the costs and standards of production of these goods.

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