Despite large stocks, the prices for butter have ceased to grow, even their strengthening is observed in Ukraine.

There are a few reasons: production volumes are declined, large operators do not want to sell the products at low prices now, and relatively large volumes are still exported.

Certain influence has a promise of Agrarian Fund to make purchases of the product.

As a result the prices have risen by 5% for two weeks. High-quality 72.5% butter is offered basically at UAH 40 000-41 000/t now.

Though internal prices have grown also, external sales are more favourable. At the same time, importers do not want to pay fair prices, because of problematical purchases (partially connected with transit through Russia). Moreover, the majority of importers cease to pay advance payment. Nevertheless, export of butter was rather big last month, at almost one thousand tonnes. Kazakhstan became the basic buyer. Some Ukrainian companies exported the products even to the Near East.

Situation remains complicated on the market of milk powder. The prices continue declining on the world market. Therefore demand and prices of traders for Ukrainian product are strongly weakened. Deliveries to Russia are completely banned. Sales to the CIS are limited. These factors influence prices on home market and result in reduction of production volumes.

Now prices of demand for SMP are lowered to UAH 37000-40000/t on home market. The companies, which have access to the market of Kazakhstan, sell the products at top price level, and even more expensive. Many operators decided to not sell the products till better times. Only those manufacturers (usually small) which need circulating assets agree to sell the products at low prices.

Source: infagro.com.ua