Forecasts for the consumption of dairy products in 2021 are negative, - Alexander Polyak

Источник: The DairyNews
Alexander Polyak, a Council member of the Russian Union of dairy industry enterprises (the Russian Dairy Union), believes that if in 2020 the consumption of dairy products remained relatively stable, the next year it can be expected to decrease due to rising prices for raw materials, writes The DairyNews.

According to the expert, cheese consumption has increased by 6-8% this year. Indicators of butter consumption remained at the level of last year. However, the demand for whole milk products varies due to the instability of the economic situation. Therefore, during the lockdown, milk consumption decreased, and after the end of restrictions - increased. On average, figures this year are about the same as last year, but there may be minor changes by the end of the year.

Alexander Polyak noted that a slight decrease was observed in April-early May, as well as in November.

The expert noted that the forecasts of consumption of dairy products for the next year are negative. They are associated with a significant cost of raw materials: 30-31 rubles without VAT. This, according to the analyst, will cause an increase in prices for final products in retail chains. He stressed that if the price is not increased, the plants will have big problems, including bankruptcy. In turn, the increase in prices in retail chains will cause a decrease in consumption, even though the pandemic has changed the structure of consumption in favor of food.

- Prices for raw material have increased significantly, so I think that in the first quarter of 2021, around March, we will see a reduction in consumption. Since an increase in the price of the finished product leads to a reduction in demand. This is called the coefficient of elasticity. It is 0.75: 10% taken away – 7% lost. Now, due to the pandemic, it has decreased to about 0.5, meaning the market has become less sensitive to price increases. However, we still need to monitor the overall economic situation, which also reflects the purchasing power, - concluded Alexander Polyak.

We will remind that the Dairy Index DIA as of November 30, 2020 was 28.36 rubles / kg (excluding VAT, fat and protein content - 3.6% and 3.0% respectively), 0.07% higher than last week and 6.9% higher than at the end of November 2019. The key factor in the growth of the indicator was the continued increase in prices for raw milk in Russian regions. According to the Index DIA app, the import price decreased slightly due to lower prices for a number of exchange-traded dairy products and the strengthening of the ruble.

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