In the first half of October prices for raw milk in Ukraine rose by 6.3%, according to the Association "Ukrainian Agribusiness Club" (UCAB).

Currently, in most cases milk from farms is purchased for 4.40-5.50 UAH/kg (including VAT), depending on grade and region. For the first time in a long period, the cost of raw milk began to show a clear upward trend.

During nine months of this year, milk production in Ukraine totaled 8.4 mln. tons, which is 4.4% less than the corresponding figures of the previous year. Seasonality is a major problem area. In September milk production on farms decreased by 8% compared with August, and by the end of the year it will fall by 9-10% additionally. That reduction in milk production is one of the reasons for increase in purchase prices. Also the rising cost of dairy products on the world market makes some impact on pricing. According to GlobalDairyTrade global index of export prices for milk last month increased by almost 10%. The main reason for this trend was the reduction of milk production in New Zealand - the largest exporter of dairy products in the world - after the record for the past 13 years prices lowering to less than 20 cents per kilogram.

"The price of raw milk in Ukraine is to increase, but increased cost of its production and depreciation of currency will make it lower than farmers prefer. In addition, further impoverishment of Ukrainian population will restrain the demand for dairy products, that will put pressure on prices", - the expert on agricultural markets of UCAB Alina Zharko says.

Association "Ukrainian Agribusiness Club" 

3 floor, 146 Zhylianska Str.

01032 Kyiv, Ukraine

Phone/Fax: +380 44 2362097/79

feschenko@ucab.ua 

Anna Feshchenko

www.ucab.ua

The Association "Ukrainian Agribusiness Club" (UCAB) www.ucab.ua was founded in 2007 to protect the economic and professional interests of players of agribusiness in Ukraine. UCAB is a unique platform in Ukraine for establishing business contacts between the leaders of agribusiness, improvement their work and dialogue with the government. UCAB actively supports Ukrainian producers in establishing and maintaining international business relations. The Association consists of the largest producers and processors of agricultural products in Ukraine.