July 2019

General Information

In July, the problems of milk processors only worsened, but the situation with raw milk producers improved. The main reason for both categories is the same - a tangible decrease in the raw milk supply and, as a result, price increase. But even with a decrease in milk production, there must be raw milk surpluses that should be exported. And if you take into account the strengthening of the hryvnia exchange rate, the export of dairy products further
decreases profitability.

Raw milk - trends

Raw milk purchase prices in Ukraine continued to show strong growth in the second half of July. Given the significant reduction in production and the flow of raw milk for processing, the country has a deficit that has grown in July into a real stress. Ukraine’s dairy industry really misses raw milk - according to official and estimated data, almost 8-10% of milk was processing less in the first half of the year in comparison with the same period last year. This is about 1000 tons of milk per day.

Butter

The Ukrainian market of butter this year has changed and, unfortunately, for the worse. In the first half of the year its production decreased by more than 20%, exports fell by a third.
Only national consumption, according to preliminary estimates, remains stable. Analyzing the current situation, it is worth highlighting a further decrease in production, a decrease in
export sales, and of course the fact of higher prices in the domestic market in comparison with export demand.

Casein

The growth trend in casein production observed in Ukraine over the past five years has been broken this year. According to the results of the first half of the year, the casein productions decreased by 20%. The main reason, of course, is to reduce the supply of cheap milk from the private sector. Traders try to buy Ukrainian technical casein mainly at 6400 USD per ton.  
Our production  in July: Butter 135 Casein 68 Cheese 57 

Our forecast for August

There will be a deficit on raw milk market. Farmers will be able to raise the price of raw milk in August as in July. Ukrainian producers will not rush to sell butter for export, it will be more profitable to sell it on the domestic market. The price for casein will rise, roughly till 6600 USD per ton, otherwise it will be more profitable to sell skimmed milk locally. In August, the price for the protein group of goods is expected to rise also.

Brief July (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 %