AGRO PERSPECTIVE «AGRO+ MILK UKRAINE #40 November 4, 2010.
Verkhovna Rada (Ukrainian Parliament) has rejected Cabinet draft Decree № 7243 (registered in Verkhovna Rada on this year Oct 12) stipulating that zero import duties should be imposed until next year Jun 01 on several imported dairy products, in part.:
- powdered milk/cream condensed or containing added sugar/other sweeteners in granules or other hard substances; special-purpose milk, baby milk (presently efficient import duty — 10%).
— butter (fat content — 85% and below), whey butter (presently efficient import duty — 10%).
It is to be reminded, earlier Minister of Agrarian Policy Myckola Prysiazhniuk had declared he was against imposition of zero import duties upon these dairy products.
As reported Ministry of Agrarian Policy referring to regions operative data, as of Oct 29/10,
Ukrainian average purchase price for 1 grade milk raw milk sold by agricultural companies has grown by 5.8%, from UAH3,428 per MT (as of Sept 29/10) to UAH3,627 per MT.
As of Oct 29/10, 1 grade milk raw milk minimal purchase price (UAH2,612 per MT) was registered in Odesa region, maximal — in Dnipropetrovsk region (UAH4,180 per MT).
As to report, as of Oct 29/10, 1 grade milk raw milk average purchase price was up 1.3% against Oct 22/10 and up as of Oct 29/09 UAH1,959 per MT.
As to Ministry, as of Oct 29/10, Ukrainian average purchase price for 2 grade milk raw milk sold by agricultural companies has risen by 6%, from UAH2,797 per MT (as of Sept 29/10) to UAH2,965 per MT.
As of Oct 29/10, 2 grade milk raw milk minimal purchase price (UAH2,150 per MT) was registered in Lviv region, maximal — in Vinnytsia region (UAH3,450 per MT).
As to report, as of Oct 29/10, 2 grade milk raw milk average purchase price was down 0.1% against Oct 22/10, but up as of Oct 29/09 UAH1,449 per MT. As to Ministry, as of Oct 29/10, Ukrainian average purchase price for 2 grade milk raw milk sold by population individual economies has risen by 3.1%, from UAH2,588 per MT (as of Sept 29/10) to UAH2,667 per MT.
As of Oct 29/10, 2 grade milk raw milk minimal purchase price (UAH2,050 per MT) was registered in Volyn region, maximal — in Kherson region (UAH3,384 per MT).
As to report, as of Oct 29/10, 2 grade milk raw milk average purchase price was same as of Oct 22/10, but up as of Oct 29/09 UAH1,316 per MT.
Besides, Ministry of Agrarian Policy also reports wholesale price (incl. VAT) for milk 2.5% fat (in plastic bags) sold by Ukrainian dairy processors has grown by 3.6% — from UAH5,03 per kg (as of Sept 29/10) to UAH5,21 per kg (as of Oct 29/10).
As to Ministry, as of Oct 29/10, wholesale price (incl. VAT) for milk 2.5% fat (in plastic bags) sold by Ukrainian dairy processors was down 0.2% against Oct 22/10, but up as of Oct 29/09 UAH3,68 per kg.
Reportedly, wholesale price (incl. VAT) for unpacked butter 72.5% fat sold by Ukrainian dairy processors has risen by 2.9% — from UAH44,53 per kg (as of Sept 29/10) to UAH45,80 per kg (as of Oct 29/10).
As to Ministry, as of Oct 29/10, wholesale price (incl. VAT) for unpacked butter 72.5% fat sold by Ukrainian dairy processors was same as of against Oct 22/10, but up as of Oct 29/09 UAH30,26 per kg.
As of now, Ukrainian milk/dairy products’ market is considered falling.
Falling market is characterized with low demand, domestic/export markets’ slack sales and prices decline as purchasers understand that prices still have not reached bottom and will, most likely, continue falling. Therefore, Ukrainian milk/dairy products’ market purchasers have assumed wait-and-see policy.
In meanwhile, market operators expect market prices will start collapsing in Nov, but then getting strengthened in Dec.
Within reporting week Ukrainian domestic market all dairy products’ prices have lowered against previous week as offer prices appeared to be much up against consumers’ real purchasing capacity.
SMP
Within this week domestic market high-quality SMP offer prices ranged within UAH23–25 per kg (down against previous week UAH26–28 per kg); low-quality SMP offer prices fluctuated within UAH21–22 per kg (down as of last week UAH22–23 per kg);
It is to be admitted, within this week SMP was not exported to EU countries as they considered Ukrainian SMP export prices too high. However, those Ukrainian market operators which have right to export SMP to RF and Kazakhstan sold it at US$3,000 per MT to these countries (down against previous week US$3,200 per MT). Besides, Ukrainian exporters shipped out SMP to non-CIS countries at US$2,600 per MT.
WMP
Within this week domestic market WMP prices have fallen to UAH32–35 per kg, down against last week UAH36–37 per kg.
As of this week, Ukrainian WMP export prices ranged within US$3,800–3,900 per MT.
BUTTER
Within reporting week Ukrainian domestic market butter prices continued going down.
As to Ukrainian traders/producers data, within this week butter 72.5% fat domestic market prices have lowered to UAH41–43 per kg (down against last week UAH43–45 per kg). Prices’ lowering was motivated with slackening of consumer demand for expensive butter, market operators’ butter high reserves and fact that dairy plants needed circulating assets for raw milk further purchases.
In meanwhile, EUR exchange rate has significantly grown against UAH, what prompted some Ukrainian market operators to declare that it is already unprofitable to buy butter in EU countries as it has become uncompetitive on Ukrainian domestic market.
Due to all above factors, Ukrainian butter export has become unattractive: taking into account domestic market prices, butter 72.5% fat average export price should have already risen to US$5,000 per MT. However, it is simply senseless to sell butter at this price.
CHEESES
As to Ukrainian producers data, within reporting week domestic market demand for cheese (as well as all other dairy products) has somewhat slackened due to domestic prices’ growth.
Within this week cheeses 50% fat domestic market offer prices have sagged to UAH49–52 per kg (down against last week UAH55–56 per kg); it is to be admitted, there were rather large spreads between prices of same kind of cheese depending on producer, region and cheese amounts remained on warehouses.
As of this week, cheeses 50% fat export prices remained US$5,400–5,500 per MT (unchanged against previous week).
WHEY
As earlier, within reporting week domestic whey market was characterized with whey high surplus caused by whey output growth (prompted by cheese high output), whey domestic market low consumption and whey passive export. As of this week, domestic market unsold whey reserves remained high.
Within this week Ukrainian home market whey prices tended towards further lowering: as of this week, prices have declined to UAH6,5–6,6 per kg (down against previous week UAH6,8–7,0 per kg); export offer prices ranged within US$780 per MT.
Within reporting week domestic market demineralized whey prices have shortened to UAH8,5–8,6 per kg (down as of last week UAH8,5–8,8 per kg); demineralized whey export price equaled to US$920 per MT.
CASEIN
Within reporting week domestic casein market situation remained same as within previous week. As of this week, Ukrainian casein reserves have been already exhausted.
Within this week domestic market casein prices ranged within UAH61–66 per kg; domestic sales were slack.
There was no casein export within this week. As of this week, casein export offer prices remained US$7,900–8,000 per MT, unchanged against previous week.
Ukrainian dairy products’ export prices (US$ per MT)
