Surplus of Dairy Products Will Force Ukrainian Producers to Lower Prices Soon – Analysts

The situation in the butter market in Ukraine continues to be unstable, as recent price increases have not solidified into a long-term trend. This was reported by the industry analytical agency 'Infagro', which monitors the dynamics of prices for dairy products.

Analysts noted that in recent weeks, quotations in the European market have significantly decreased. This decline, they say, is a result of an oversupply that has arisen against the backdrop of active dairy production. Additionally, the market is influenced by the situation with skimmed milk powder, where high price conditions persist. As a result, stocks of dairy products are accumulating, which further exerts pressure on prices.

Experts from 'Infagro' emphasized that in the absence of positive signals from the European market, industry participants anticipate the possibility of further price adjustments both in export markets and domestically. This scenario is supported by increasing production and the accumulation of unsold volumes of products, creating additional pressure on the market.

According to analysts' estimates, the volume of butter production in Ukraine shows an increase compared to last year. However, export activities do not exhibit a similar dynamic, raising concerns among producers. The high cost of dry milk remains an additional incentive for producers, as it partially compensates for losses from the depreciation of butter.

'Infagro's' forecasts indicate that in the near future, the production volumes of butter and other dairy products in Ukraine will continue to grow. The oversupply in the market, according to experts, will force producers to lower prices, which, in turn, will lead to further instability in the dairy market.