Demand for dairy products may decrease in 2021- Artem Belov
- Let me remind you that according to the results of 9 months, the income of population decreased by about 4%. At the end of the year, the figures will be comparable. Analysts estimate the fall in GDP at the level of 4-6%. In general, the food category and dairy products in particular are very dependent on the income situation, so if this year demand was supported by factors such as state support, border closures, etc., it is not a fact that these factors will be implemented in 2021. This means that demand may decrease next year, the expert said.
Artem Belov added that such a situation might occur against the background of increased "price scissors".
- On the one hand, there is a rather serious increase in the production of raw materials, stagnation of consumption, as a result of which the cost of products increases. According to our forecasts, this year the cost of raw materials will grow by about 15%. This is a large figure that can be compared to the increase in the price of dairy products on the shelf in 2020, which averaged about 3.8% for the category. Even food inflation was 5.1%. The dairy category, as a socially significant product, grew very little in price. And we will really face these "scissors": an increase in the cost of production, an increase in the cost of processing against the background of stagnant consumption and pressure from retail chains, in terms of the possibility of price growth, the expert said.
He noted that this would lead to a serious decrease in profitability, which may negatively affect the processors of the "second tier", as a result of which it will accelerate the consolidation process. According to Artem Belov, this may not be so bad for the industry, because at the moment the market is quite fragmented, both in terms of production and raw materials, which creates certain opportunities for a number of processes that already exist, but are accelerated due to this situation.
- Summing up, we can say that in 2021 we expect the following. From the point of view of demand, we expect that it will remain at the same level or perhaps even lower. The increase in the raw material base, according to our estimates, will be about 700-750 thousand tons in milk equivalent or about 3-3. 5%. We expect that next year's exports will grow by about 200 thousand tons or about 20-22%, which is likely to reach 1 million tons in milk equivalent. In addition, next year, because of the weakening of the ruble, we expect a decrease in imports by about 5-7%, - concluded Artem Belov.
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