The volume of foreign trade in dairy products in the first half of October amounted to $20.4 million and increased by 7.8% compared to the first half of September, according to the expert and analytical service of the Union of Dairy Enterprises of Ukraine (UDEP).
According to the report, the volume of exports increased by 5.3% to $9.8 million, and imports by 10.2% to $10.6 million. In particular, the share of cheese exports increased by 67%, and fermented milk products by 4%.
Exports of whey decreased by 58%, butter and milk fats by 19%, and milk and cream by 6%.
At the same time, imports of butter and milk fats increased by 76%, whey by 14%, fermented milk products by 11%, and cheese by 5%. A 3% decline in imports was observed only for milk and cream, the UUL stated.
In Ukraine, raw milk prices rose by 10% in September, and over the past three months they have risen by almost a quarter, while the cost of processed products has risen by 15%, according to Infagro, an industry information and analytical agency.
“The weather has become quite comfortable, there are fewer power outages, cow productivity is recovering, and milk is available. With the relative stability of energy supply, there are fewer problems with the collection of raw materials and logistics. All this is good for milk producers, but processors suffer from the growth rate of prices for raw milk,” the analysts said.
Experts noted that the current purchase price of milk at 18 UAH/kg is no longer surprising. Moreover, there are cases of its purchase even at 19 UAH/kg. Processors are also trying to raise prices for their products. However, while milk prices have risen by a quarter, few have managed to increase prices for most dairy products by more than 15%, except for some butter producers. As a result, most factories are already operating on the brink of loss, and some are making a loss.
“The price increase will not stop in October. Fresh dairy products and cheeses may rise by another 12-15% by the end of the year. That is, dairy inflation in 2024 could be three times higher than the overall inflation in Ukraine. Of course, this will lead to a decrease in the consumption of dairy products in favor of other products with a lower degree of price increase,” experts predict.
Analysts believe that the main reason for the rapid rise in raw material prices is the high butter prices, which have already reached their peak.
“It is very likely that in October European traders may significantly reduce their demand prices for Ukrainian products. In this case, the chase for raw materials in Ukraine will definitely stop, and starting in November, milk purchase prices will stop rising. And if the rise in prices causes a significant drop in sales of dairy products, it is even possible that, despite the period of the lowest supply in the season, there will be a certain decrease in the cost of raw materials,” Infagro summarized.
In January-August 2024, Ukraine increased its foreign trade in dairy products by 7.9% to $307 compared to the same period last year, the Union of Dairy Enterprises of Ukraine (UDEP) reported on its Facebook page.
According to the report, the negative balance of exports and imports of dairy products slightly increased compared to the same period last year and amounted to -$32.6 million against -$31.2 million. At the same time, imports were 1.24 times higher than exports; in January-August 2023, this excess was 1.25 times.
According to analysts, exports in January-August 2024 increased to $137.3 million, which is 8.3% higher than in the same period last year.
The growth in exports compared to the previous year was recorded for fermented milk products (+27% in physical terms and +32% in value), whey (+43% and +38%, respectively), and cheeses of all kinds (+40% and +31%, respectively).
At the same time, exports of butter and milk fats decreased significantly (-25%), while the drop in value amounted to 9%, which is explained by a significant increase in prices for these products this year.
Experts noted that import volumes in January-August 2024 increased by 7.6% compared to the same period last year – up to $170 million. At the same time, growth is observed in the categories of butter and milk fats – 2.3 times in volume terms, twice in value terms, as well as cheeses (+8% in volume terms).
Ukraine also reduced imports (in physical terms) of milk and cream not condensed (drinking) by 3.3 times, whey by 28% and fermented milk products by 16%, the UGCC summarized.
Ukraine, despite low prices on the global market, increased exports of most dairy products in May, both compared to April this year and compared to May 2023, Infagro, an industry information and analytical agency, reported.
According to experts, the reason for this is a significant increase in processing volumes against the backdrop of much weaker domestic sales growth than last year. Among the main commodity items, Ukraine exports the least amount of butter and cheese products. Exports of spreads, casein, and whey powder increased significantly compared to May last year.
At the same time, imports of dairy products (butter, rennet cheese, processed cheese) declined in May. Contrary to expectations, imports of cheese stopped growing. This is due to the upward trend in prices for milk and dairy products in Europe and, in particular, in Poland, the main supplier of this product to Ukraine, analysts explained.
“In June, exports of dairy products will increase further, while imports are likely to decline,” Infagro predicts.
As reported, in January-March 2024, Ukraine increased exports of dairy products by more than 40%. At the same time, imports decreased, but analysts urge domestic producers to pursue a reasonable pricing policy in order not to lose their positions in the domestic market.
Astarta, Ukraine’s largest sugar producer, intends to start selling sugar and dairy products under its own brand in stores without intermediaries in 2024, the company’s founder and CEO Viktor Ivanchyk told Forbes in an interview.
According to him, the agricultural holding plans to sell thousands of tons of sugar this year, and tens of thousands of tons in the following years. Astarta’s dairy products can already be bought in supermarkets under the brands of its established partners Lustdorf, Danone, Yagotynske, Molokiya, Kaniv, and Galychyna.
In addition, in 2021-2023, Astarta quadrupled its investments to almost UAH 1.7 billion. In 2024, the agricultural holding will invest in the production of soy protein concentrate, warehouse logistics, and electricity generation from biogas.
“Investments in Ukraine are the most profitable right now,” Ivanchyk says.
“Astarta is a vertically integrated agro-industrial holding company operating in eight regions of Ukraine. It comprises six sugar factories, agricultural enterprises with a land bank of 220,000 hectares and dairy farms with 22,000 cattle, an oil extraction plant in Globyno (Poltava region), seven elevators and a biogas complex.
In 2023, the agricultural holding reduced its net profit by 5.0% to EUR 61.9 million, and its EBITDA decreased by 6.1% to EUR 145.77 million, while revenue increased by 21.3% to EUR 618.93 million.
In April, Ukraine increased its total foreign trade in dairy products by 10.7% compared to March to $41.4 million and by 20% compared to February, the press service of the Union of Dairy Enterprises of Ukraine (UDEP) reported.
According to the report, exports of dairy products were 17.8% higher compared to March, amounting to $17.1 million, and 11% higher compared to February, up to $15.4 million.
At the same time, import volumes increased by 6.2% compared to March and amounted to $24.3 million, which is 27.4% higher than in February, when it was recorded at $19.1 million.
Experts pointed out that imports in April were 1.43 times higher than exports. In March, this figure was 1.58 times higher than in February, in February – 1.24 times higher than in January, in January – 1.93 times higher than in December.
“In April 2024, the situation with exports of dairy products improved – they were exported for $ 17.1 million – the last time such volumes were recorded in June 2023. However, import volumes continued to grow – up to $ 24.3 million, which corresponds to the level of January-2024 (imports have been growing for the 2nd month in a row),” the UMPU stated.
