Butter Surplus and Weak Demand Threaten to Drive Prices Down

Due to weak demand and limited export opportunities, prices could fall in the near future, according to analysts at Infagro.

«It is becoming increasingly difficult to sell butter, even at lower prices. Exports to the EU are unlikely to help stabilise the market due to unfavourable market conditions. Demand from Moldova and the countries of the Caucasus remains limited,» the experts state.

They add that Ukrainian butter exports picked up somewhat in September, but over the first three quarters of the year they declined by almost half compared with the same period last year. This negatively affected foreign currency earnings from dairy exports and increased pressure on domestic prices.

According to the experts, a similar trend is being observed in the market for vegetable-fat and butter blends: exports declined due to weaker demand, particularly in the Middle East. At the same time, shipments increased somewhat in September.

«Significant butter stocks, weak external demand and difficulties with sales are creating conditions for a further decline in prices on the Ukrainian market,» the analysts conclude.