In May 2023, Ukraine increased exports of almost all types of dairy products. Only the volumes of butter deliveries to foreign markets decreased. The likely reason for a certain improvement in foreign trade is the lifting of temporary bans on the import of agricultural products by the countries of Central and Eastern Europe at the beginning of May and the resumption of the use of their transport infrastructure for the sale of dairy products to the markets of third countries, reports the analyst of the Association of Producers of milk Gеorgiі Kukhaleishvili.
According to preliminary data of the SSU, in May 2023, Ukraine exported about 9.76 thousand tons of dairy products worth 22.53 million dollars. Natural volumes of exports increased by 29.78%, and revenue — by 16.05%. The main export categories in monetary terms were the following goods:
- dry and condensed milk — 25.57%;
- non-condensed milk and cream — 21.89%;
- milk whey — 16.75%;
- ice cream — 14.68%.
Last month, Ukraine increased the volume of deliveries to foreign markets of milk and non-condensed cream to 2.14 thousand tons, which is 22.37% more in physical volume than in April. Export revenue for this position amounted to 1.22 million dollars, which is 19.27% more than the previous month. The main buyer of Ukrainian milk and cream was Moldova, where Ukrainian enterprises shipped 93.2% of the volume of exports of the mentioned goods.
In May, export deliveries of dry and condensed milk grew to 2.49 thousand tons (+39.23%), and revenue from these items increased to 6.03 million dollars. (+35.69%). About 62% of the export of these products was sent to the EU, which is not surprising, because in the conditions of the sea blockade by the Russian occupiers, Ukraine is forced to use the Romanian port of Constanta or the Baltic ports of Poland for the supply of food industry products to the countries of Asia and Africa.
The volume of export of fermented milk products amounted to 321 tons for the amount of 397 thousand dollars, which is 37.59% more in physical volume and 32.75% more in monetary equivalent. About 99.6% of exported goods were sent to Moldova, UAE and Armenia.
Ukraine exported 1.63 thousand tons of whey worth 1.02 million dollars. The natural volume of whey export grew by 36.64%, and the revenue for the delivered product increased by 26.82%. The main destinations of milk whey sales in May were China (30.6%), Poland (26%), as well as countries such as Malaysia, Jordan, Libya, the Philippines, Vietnam, Saudi Arabia, Turkey, Lebanon and Moldova, where 44% of the goods were shipped.
The volume of cheese deliveries to foreign markets increased to 705 tons (+27.04%), and revenue grew to 3.24 million dollars. (+20.66%). Moldova and Kazakhstan accounted for about 80.38% of Ukraine's cheese exports.
The export of ice cream amounted to 1.43 thousand tons, which is 62.78% more than in April. Revenue amounted to 4.52 million dollars, which is 62% more compared to the previous month. The lion's share of Ukrainian ice cream exports went to the EU (53%) and Moldova (30.42%).
In May, Ukrainian suppliers reduced deliveries of butter and casein to foreign markets. The export of butter amounted to 558 tons worth 4.28 million dollars. This is almost 45% less in physical terms and 48% less in monetary terms. The main destinations of oil exports were Moldova and Azerbaijan, where 61% of the product was shipped.
Last month, the export volume of casein and caseinates amounted to 476 tons worth 3.2 million dollars. Natural volumes of goods exports decreased by 23%, and revenue decreased by -39.54%. Processors are reducing the volume of production of technical casein in conditions of lower prices for the product.
Gеorgiі Kukhaleishvili suggests that the likely reason for the increase in total volumes of Ukrainian dairy exports in May was the lifting of the ban on the import of agricultural products from Ukraine by the governments of Poland, Hungary, Slovakia and Bulgaria. In order to strengthen the ratings, the ruling parties supported local farmers, who insisted that the reason for the fall in prices for their products is the influx of Ukrainian goods, which, apparently, create unwanted competition on the EU market. However, thanks to the efforts of Ukrainian diplomacy and European non-governmental organizations, the bans were lifted.
The fact is that the majority of dairy products imported into the EU from Ukraine are subsequently delivered to the markets of third countries through the Black Sea or Danube ports of Romania or the Baltic ports of Poland. Demand for dairy products on the EU market is limited, and Ukrainian products are not interesting to local consumers. In the warehouses of European countries, so many exchange goods have accumulated that they cover the demand on the domestic market. Probably, the increase in the volume of butter exports from Ukraine is restrained by too much supply of this product in Europe. Cheap European cheeses and butter are attractive to customers in foreign markets and they create competition for the products of Ukrainian exporters.
In May, Ukraine reduced the volume of imports of dairy products to 4.97 thousand tons (-4.2%). The reduction occurred mainly due to a decrease in the supply of long-term milk and cream, cheeses, condensed milk from European countries to Ukraine. In May, Ukraine did not import casein and caseinates. However, the Europeans increased deliveries to Ukraine of butter to 74 tons (+25.19%), sour milk products to 829 tons (+11.37%) and whey to 567 tons (+7.14%), which creates unwanted competition for products of domestic manufacturers in the domestic market.
We would like to remind you that the Association of Milk Producers supports and advocates changes to the Tax Code of Ukraine to reduce the VAT rate for milk producers and processors from 20% to at least 10%, which will contribute to lower prices for raw materials and finished products in the interests of consumers.