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Ukraine: Increase in Export Will Likely Boost Milk Prices This Summer

Ukraine 25.06.2024
Source: The DairyNews
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The rise in exports of exchange commodities is expected to prevent a decline in raw milk prices in Ukraine during June. The resurgence of global demand for dairy products, combined with a likely reduction in milk yields during the summer heat, is expected to impact the purchase prices towards the end of June and early July.
Ukraine: Increase in Export Will Likely Boost Milk Prices This Summer
Source: freepik.com
This was reported by Georgiy Kukhaleyshvili, an analyst at the Association of Milk Producers.

As of June 5, the average purchase price for extra grade milk was UAH 13.69/kg excluding VAT, which is 30 kopiyky less than a month ago. The price range for this grade varies fr om UAH 13.20 to UAH 14.10/kg excluding VAT. The upper lim it of the price range decreased by 50 kopiyky, and the lower limit decreased by 20 kopiyky over the last month.

The higher grade on average costs UAH 13.69/kg excluding VAT (down 30 kopiyky). Prices for higher grade milk range fr om UAH 13.20 to UAH 14.10/kg excluding VAT. Compared to the results of monitoring in the first half of May, the lower lim it of the price range decreased by 20 kopiyky, and the upper limit decreased by 50 kopiyky.

The average price for first grade milk was UAH 12.95/kg excluding VAT, which is 34 kopiyky less compared to the price in the first half of May. The minimum price in farms was UAH 12.65/kg, and the maximum price – UAH 13.20/kg. Over the last month, the lower limit of the price range did not change, while the upper limit decreased by 90 kopiyky.

Accordingly, the weighted average price of the three grades amounted to UAH 13.44/kg excluding VAT, which is 31 kopiyky less than a month ago.

Georgiy Kukhaleyshvili notes that at the beginning of June, the decline in raw milk prices in Ukraine was localized. The maximum limits of the price range significantly decreased. However, at the beginning of the summer, there was no widespread fall in milk prices, which was typical for the second half of April and throughout May. The growth in export volumes of dairy products from Ukraine may prevent further decreases in purchase prices. Rising prices for exchange goods worldwide, the devaluation of the hryvnia, as well as the decrease in the price of raw milk during previous weeks have made Ukrainian dairy products attractive to buyers on foreign markets. In Ukraine, the profitability of producing exchange goods, including dry milk and cream butter, has improved.

If Ukrainian companies continue to increase the volume of exports of exchange goods, then a decrease in raw milk prices in June is not expected. Likely, by the end of June and the beginning of July, dairy processing enterprises may revise purchase prices upwards, as milk yields are likely to begin to decrease due to the summer heat, but the demand for exchange goods worldwide will continue to stimulate the export activity of Ukrainian companies. On the domestic market, surpluses of raw milk are likely to disappear, and its supply may balance with demand.

It is worth noting that in May, raw milk in Ukraine was on average 26% cheaper than in the EU.

Source: Press Service of the Association of Milk Producers.
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