Milk price is strongly increased in Ukraine
Milk market of Ukraine continued to show a prompt rise in price in the second half of November. The milk price reaches new record levels.
Despite a decrease in consumption of dairy products, processors all the same do not have enough milk. Decline of milk production is the main reason. Low stocks of commodity products are one more problem.
The products have been exported since March. Even in September-October stocks declined generally because of export. Such situations were observed recent years, but at that time, except last year, import rescued. Now import is not favourable because of devaluated hryvnia.
Therefore all impact is absorbed by domestic market: as well as on milk market the prices grow for butter, milk powder and cheeses.
Range of milk prices from agricultural enterprises is improperly wide. Processors do not keep pace with desires of big producers. Level of UAH 6.40-6.70/kg, which was paid at the end of November, is not high enough for them already. It seems some producers will value milk at UAH 7.00/kg from December.
It is clear that spot prices also grow in this situation: at the end of November milk is resold at UAH 5.80-6.60/kg, cream (36% fat content) – at UAH 30-33/kg, skimmed milk – at UAH 3.90-4.60/kg.
Milk market will show further growth in Ukraine the next few days. But in January the situation may change cardinally. Export contracts come to an end, prices continue weakening on global markets, consumer demand fall as prices grow. Therefore processors can essentially reduce prices, or refuse expensive milk.