In January-June 2020, dairy products were imported to the amount of USD 137 million which is 2.6 times more than over the same period last year. The increase of supplies to Ukraine from abroad took place in all groups of dairy products. Supply of butter grew more than 7.7 times (+6.5 thousand tons) whereas milk and non-condensed cream grew 5 times (+5 thousand tons).
‘Substitution of domestic butter with imported one from the EU (mostly Polish) is stipulated by more competitive prices of the European products on the market, including existing strong state support for this segment and promotion of export activities in the European Union. A slight decrease (-2%) of prices for domestic products over the past two months makes it difficult to compete with the European goods the prices of which dropped by 13%’, explains Valentyna Kropyvko, the UCAB analyst.
At the same time, in January-June 2020 Ukraine exported dairy products to the amount of USD 87.5 million that is one third or 32% less than over the same period last year. Therefore, export supply of all groups of dairy products reduced. The largest rates of reduction were shown by the supply abroad of butter - by 43% (-5.4 thousand tons), milk and condensed cream - by 36% (-7.7 thousand tons).
The balance of dairy trade for the first half of the year is negative and amounts to USD 49.4 million. The market is experiencing active replacing of domestic products with imported ones (due to reduction of livestock and dairy production).
‘Despite profitability of domestic milk production as well as positive trends to increase the share of milk production by agricultural enterprises in the total production, without effective and long-term comprehensive state support for production and processing the crisis in the dairy industry is going only to intensify’, emphasized Valentyna Kropyvko.