Ukraine's Milk Price Growth Expected to Slow in December Amid Weak Domestic Demand
Rising raw milk prices in Ukraine, fueled by increased interest from European traders in Ukrainian butter, are expected to stabilize in December as domestic demand for dairy products declines, according to the Association of Milk Producers (AMP).
November Price Surge Driven by Exports
As of November 20, the average purchase price for premium-grade raw milk increased by UAH 1 per kilogram to UAH 19.40/kg (excluding VAT), while first-grade milk rose by UAH 1.20 to UAH 18.65/kg. Second-grade milk prices also climbed by UAH 1 to UAH 17.70/kg, bringing the weighted average price across grades to UAH 18.58/kg, up UAH 1.07 from the previous month.
The price hikes were attributed to growing international demand, particularly from European markets.
“With New Zealand butter prices reaching $7,000 per tonne, European traders turned to Ukrainian producers for cost-competitive alternatives,” said AMP analyst Heorhii Kukhaleyshvili. “After an initial dip in demand for exchange-traded commodities in early November, interest in butter and cheese from foreign markets has rebounded.”
Despite export-driven price increases, domestic demand for raw milk from Ukrainian dairy processors has weakened compared to earlier in the fall, AMP noted. Reduced consumer purchasing power, driven by rising food prices, has shifted some Ukrainian consumers to more affordable alternatives like spreads instead of butter.
"Consumers with lower incomes are cutting back on dairy product purchases, reflecting broader economic pressures," the association reported.
Outlook for December
High prices for finished dairy products and challenges in domestic sales are expected to temper further raw milk price growth. AMP forecasts a modest increase in purchase prices in early December, followed by stabilization in the latter half of the month as the domestic market continues to grapple with subdued demand.
The balance between export opportunities and constrained local consumption will remain a key factor in shaping milk prices in the near term.
As of November 20, the average purchase price for premium-grade raw milk increased by UAH 1 per kilogram to UAH 19.40/kg (excluding VAT), while first-grade milk rose by UAH 1.20 to UAH 18.65/kg. Second-grade milk prices also climbed by UAH 1 to UAH 17.70/kg, bringing the weighted average price across grades to UAH 18.58/kg, up UAH 1.07 from the previous month.
The price hikes were attributed to growing international demand, particularly from European markets.
“With New Zealand butter prices reaching $7,000 per tonne, European traders turned to Ukrainian producers for cost-competitive alternatives,” said AMP analyst Heorhii Kukhaleyshvili. “After an initial dip in demand for exchange-traded commodities in early November, interest in butter and cheese from foreign markets has rebounded.”
Domestic Demand Weakens
Despite export-driven price increases, domestic demand for raw milk from Ukrainian dairy processors has weakened compared to earlier in the fall, AMP noted. Reduced consumer purchasing power, driven by rising food prices, has shifted some Ukrainian consumers to more affordable alternatives like spreads instead of butter.
"Consumers with lower incomes are cutting back on dairy product purchases, reflecting broader economic pressures," the association reported.
Outlook for December
High prices for finished dairy products and challenges in domestic sales are expected to temper further raw milk price growth. AMP forecasts a modest increase in purchase prices in early December, followed by stabilization in the latter half of the month as the domestic market continues to grapple with subdued demand.
The balance between export opportunities and constrained local consumption will remain a key factor in shaping milk prices in the near term.
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