Too much milk in Ukraine. Raw milk prices are falling
During the previous week cheese price in Ukraine dropped 1.6%. Raw milk purchase prices also decreased – by 3-4%. Market specialists link this tendency to the fact that Ukraine decreased cheese supplies to Russia. At the moment Russian import of Ukrainian dairy products is diminishing, and in the nearest future the country can entirely close the borders.
Political reasons are much more important for Russia than economical, that is why experts believe the threat of full ban is really possible. As a result the Ukrainian market will have to reorient onto other markets. Moreover the European Union is going to open borders for Ukrainian products. It is worth mentioning that it will be difficult for Ukrainian producers to increase export to Europe because only a small part of local milk corresponds to the European requirements, around 60% of milk in Ukraine is produced by private farmers. Some market participants consider China, Asia and Middle East countries also to be a prospective market. Another way out of the situation – is to start producing milk powder, which is much easier to export anywhere.