How prices for dairy products have changed
According to AVM, over the past year, the price of most dairy products has increased, although the rate of price growth remains different depending on the category.
Pasteurized milk increased in price by 1-5%, depending on the type of packaging. Kefir increased in price by 6-9%, sour cream - on 1–8%, a drinkable and spoonable yogurts added close 10%.
Also approx 5% became more expensive sour milk cheese. Ukrainian butter became more expensive at 3%, while imported products cost almost twice as much.
The situation in the hard cheese market is heterogeneous. Some of the products became more expensive 6-8%, while some popular varieties, in particular "Gouda" and "Mozzarella" Ukrainian production, on the contrary, became cheaper.
Why Ukrainians buy less dairy products
The Association of Milk Producers notes that the main reason for the slowdown in sales was a decrease in the purchasing power of the population.
Additional pressure on the market creates decrease in the number of solvent consumers due to mobilization and emigration, as well as the end of the factors that previously supported demand.
Manufacturers call it a separate problem increasing competition with cheaper European cheeses, which are actively displacing Ukrainian products from store shelves. Due to this, some enterprises are already forced to reduce production, and the increase in the number of promotional sales negatively affects the profitability of the industry.
Why dairy products can become more expensive
Despite weak demand, producers expect further price increases. According to experts' forecasts, by the end of summer and in the autumn-winter period, most dairy products may increase in price by another 5–10%.
The main reasons are called:
- increase in the price of diesel fuel;
- an increase in the cost of electricity;
- increase in logistics costs;
- increase in the price of packaging materials;
- exchange rate fluctuations;
- increase in the purchase price of dairy raw materials.
Simultaneously a significant increase in butter prices is not predicted in the near future. This is explained by the oversupply of products in the domestic market and weak opportunities for export.
What is happening in the market
Experts note that the Ukrainian dairy market is currently under double pressure. On the one hand, manufacturers are faced with a rapid increase in the cost of production, and on the other hand, demand is gradually decreasing due to a change in consumer attitudes and increased competition with imported products.
In the summer, the situation is further complicated by the seasonal factor: consumers traditionally buy vegetables and fruits more often, due to which sales of dairy products remain lower. If production costs continue to rise, and imports continue to strengthen their position, Ukrainian manufacturers may face the need to revise their pricing policy in the coming months.
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