August 2019

General Information

Summer ends on a pessimistic "note" for participants in the dairy business. The urgent problems of the industry are aggravated - the shortage of raw materials is aggravating, prices for milk and dairy products have to increase, domestic sales are not growing, Ukrainian dairy products are becoming uncompetitive in foreign markets, and imports are increasing.

Raw milk - trends

In the second half of August, the raw milk market is more stable than it was in July. Despite a continued decline in the raw milk supply, the demand for milk also dropped - exporters completed or reduced volumes under high-margin contracts, dairy producers declined their promo-sales activities. As a result, producers stopped chasing raw milk and are no longer ready to purchase milk at the price level that exceed today's market prices. At the end of summer, the milk from farms is estimated mainly in the range 0.36-0.38 USD/litr.

Butter

The Ukrainian butter market this summer was surprising in its variability. Prices either fell sharply at the beginning of the season or significantly increased in the middle of summer. Now they have fallen again, which is also not entirely logical for the end of the season. There are many reasons for reducing the butter price: a decrease in domestic demand (many operators have already managed to make the necessary reserves), and a reduction in exports (due to falling world prices), and the fact of import purchases (plays a psychological role).

Casein

Casein production in Ukraine continues to fall, exports, respectively, also. Despite this, traders by the end of the summer did not agree to increase prices. If a month ago, individual operators managed to sell technical acid casein at 6600 USD per ton, now importers estimate this product at best at 6400 USD per ton. Casein production in Ukraine fell by 13% in August compared to July.  

Our production  in August:
Butter 116
Casein 56
Cheese 62

Our forecast for September

In early September, operators will not rush to revise the price tags for raw milk. The raw milk price is clearly overheated, the farmers margin is very decent and exceeds the EU indicators.
The actions of processors will largely depend on the exchange rate and the reaction of buyers to rising shelf prices. Butter and casein production will decline significantly compared to August.
Internal consumption of dairy products will increase, mainly due to the beginning of the school year.

Brief August (pdf)

This information booklet is intended only for customers and partners of Radyvylivmoloko LLC. Not for public or commercial use. All the information, mentioned here should be considered only as and opinion of Radyvylivmoloko staff.

Exchange rate
Exchange rate change, 0,9 %
Fluctuation rate, 2,4 %