The situation in the Ukrainian butter market is worsening: after active summer exports, warehouses of enterprises have begun to fill up, and the sale of products within the country is becoming increasingly difficult.
This is stated in the publication of INFAGRO, the Ukrainian News agency reports.
It is noted that export sales are also facing additional difficulties.
Only those producers who are ready to significantly reduce prices can now sell their products stably.
Usually these are companies that lack working capital.
However, the current price level is unprofitable for most producers operating in the butter segment together with skimmed milk powder or casein.
Due to the increase in the price of raw materials, production is becoming less profitable: the purchase prices for milk necessary for break-even remain unattainable for most enterprises.
At the end of October, there was a noticeable decrease in the price of block butter.
Manufacturers of packaged products hold somewhat better positions, but competition in this market is intensifying.
To increase sales, companies are forced to hold promotional discounts, which negatively affects profitability.
The situation with butter exports has also worsened.
Some enterprises are reducing prices in order to stay on foreign markets, in particular in Moldova.
Demand for Ukrainian butter in the Caucasus remains, but sales volumes there are limited.
Expectations for additional opportunities after the introduction of new duty-free quotas to the EU have also not been met, the demand of European traders is accompanied by lower price offers that do not cover the cost of production.
Some factories have already reduced or temporarily stopped butter production due to unprofitable production.
As a result, production volumes in October were lower than last year, which is the first such case in recent times.
As the Ukrainian News agency earlier reported, in early September, the Ukrainian butter market experienced a decline in demand, accompanied by a gradual drop in prices.
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