The current level of export prices does not allow Ukrainian companies to earn by export sales of dairy products. The increased cost price, which was reflected in the price growth for the domestic customers also had a significant impact on demand reduction.

Dairy processors had to reduce raw milk prices in February, but noticeable changes occurred in March.

The actual Infagro Raw Milk Index made 221 points in February (at the level of preliminary forecast), which was 3 points (1.3%) lower than in January. The projected index for March is 215 points, which is 6 points (2.7%) lower than in February and 36 points (20.1%) higher than in March of last year.

Milk prices in February were falling grafually. This allowed estimate the level of Raw Milk Index generally for the month. Sharper reduction of milk prices is expected in March, and this opinion is confirmed by market operators.

According to actual data for February, the Infagro Dairy Commodities Index made 210 points (preliminary forecast was at 216 points), which is 4 points (1.9%) lower than in January. The projected index for March is 207 points, which is 3 points (1.4%) lower than February index of and 36 points (21.1%) higher than it was in March of last year.

The deviation of the Dairy Commodities Index from that forecasted in February was caused by high export volume of cheaper products – milk powder and butter. At the same time, export of cheese and cheese products remained at the expected level.

The Infagro Raw Milk Index is a weighted average price for kilogram of milk from farms (VAT excluded) and households, related to volumes delivered for processing for each category, taking January 2011 as 100 points.

The Infagro Dairy commodities Index is a weighted average of actual export prices and volumes of three main products: SMP, butter, cheeses (cheese product is included into volumes together with cheeses, but not included into price indicator). January 2011 is taken as 100 points.

INFAGRO