Ukraine: Domestic Dairy Demand Surges, Impacting 2023 Exports
Source: The DairyNews
In 2023, milk and dairy product exports experienced a significant dip of 25%, primarily attributed to the resurgence of demand within the Ukrainian domestic market. This shift was influenced by the return of Ukrainians from abroad, resulting in a doubling of anticipated domestic consumption in 2024, as projected by Olena Zhupinas, the Project Manager for Relations with Processors at the Association of Milk Producers.
Zhupinas highlighted that the spike in exports observed in 2022 was a consequence of decreased domestic consumption during the first and second quarters. Factors such as population outflow, disruptions in supply chains, and store closures led to a substantial surplus of raw milk, a considerable portion of which was processed into commercial dairy products and subsequently exported. This export surge was particularly fueled by the favorable price of milk in Ukraine, which stood at 50% of the European market rate in 2022.
The expert underscored the advantageous position this created for European traders who found Ukrainian products attractive for buying and reselling. However, the scenario changed in 2023 as domestic demand in Ukraine rebounded with the return of its populace from overseas. The surge in domestic consumption, registering a 14% increase compared to 2022, prompted the redirection of milk from export-oriented dairy products to meet the rising demand for fresh produce and cheeses within the country.
Zhupinas further highlighted a domestic shortage of butter, resulting in unprecedented levels of imports. Consequently, the year 2023 witnessed a deficit in the trade balance for dairy products.
Despite the trade challenges, Ukraine remains poised for promising developments in milk production. The country holds potential for growth, catering to both export and domestic market demands. The Association emphasized that, with the average Ukrainian consuming only 190 kg of dairy products in milk equivalent, there is ample room to double domestic consumption, aligning with the recommended sanitary norm of 380 kg for proper human body function.
The expert underscored the advantageous position this created for European traders who found Ukrainian products attractive for buying and reselling. However, the scenario changed in 2023 as domestic demand in Ukraine rebounded with the return of its populace from overseas. The surge in domestic consumption, registering a 14% increase compared to 2022, prompted the redirection of milk from export-oriented dairy products to meet the rising demand for fresh produce and cheeses within the country.
Zhupinas further highlighted a domestic shortage of butter, resulting in unprecedented levels of imports. Consequently, the year 2023 witnessed a deficit in the trade balance for dairy products.
Despite the trade challenges, Ukraine remains poised for promising developments in milk production. The country holds potential for growth, catering to both export and domestic market demands. The Association emphasized that, with the average Ukrainian consuming only 190 kg of dairy products in milk equivalent, there is ample room to double domestic consumption, aligning with the recommended sanitary norm of 380 kg for proper human body function.
