The market of butter and spreads – 2016

report-maslo-eng-2016

Once Ukraine has produced huge amounts of butter and was considered one of the largest world exporters of this product. Later, production of this product significantly shrank, exports virtually ceased and all sorts of spreads and vegetable-cream mixtures appeared on the market. As a result, in 2009-2013 Ukraine became a net importer of butter.

Deep geopolitical and economic crisis of 2014-2016 forced those in butter and spreads business change their business strategies. After the Russian market of cheese was lost, production of butter in Ukraine significantly increased and the country again became one of the major exporters of butter. At the same time, for various reasons production, consumption and exports of spreads got significantly declined. Thus, before 2014 Ukraine was dependent on the world market of butter as an importer, now it is dependent as an exporter.

Overall, the market of butter and spreads in Ukraine is now on the verge of big changes. There are many new challenges and opportunities, forcing operators to seek effective ways of doing business.

The report proposed by INFAGRO will make much simpler find proper response to these challenges. It will be interesting to management of the companies producers of butter, spreads, vegetable-cream mixtures and substitutes for butterfat. It is also useful to exporters and importers of these products, retail chains operators and analysts of consulting companies.

The main topics highlighted:

  • Production
  • Consumption
  • Foreign trade
  • Price trends
  • Features of the world market
  • Features of the Customs Union market
  • Conclusions and Recommendations

General Summary:

  • Deep geopolitical and economic crisis of 2014-2016 forced butter and spreads business operators change their business strategy
  • The proportion of butter and spreads in total dairy production in the country rose to a quarter
  • Almost a third of the milk that goes to industrial processing is used for production of butter (in conjunction with SMP and casein)
  • In late 80′s in the USSR there were produced annually more than 300 thousand tons of butter
  • In 2009-2011 in Ukraine there were produced only 62-66 ths. t of butter
  • Because of the geopolitical crisis in 2014 production of butter in Ukraine has grown significantly – according to the official statistics, more than 100 thousand. t. INFAGRO estimates 80 ths. t/year
  • In the future production of butter will get reduced again
  • 60% of all butter is produced by ten companies
  • Between May and August half of all butter is produced
  • From 2000 to 2007 production of spreads increased 7.5 times
  • Over the past five years, production of spreads and vegetable-cream mixtures decreased almost two times
  • Four companies produce three-quarters of the total production of spreads and vegetable-cream mixtures in the country
  • Ukrainians consume times less butter than consumers in the European Union
  • In 2015 there were sold two times less spreads and vegetable-cream mixtures on Ukrainian market than in 2007
  • External sales of butter and spreads brought about 15% of foreign currency earnings from exports of dairy products
  • From 2009 to 2013 Ukraine was considered a net importer of butter, in 2014 it again became a major exporter of this product
  • More than 40% of Ukrainian exports of butter is sold abroad to non-CIS foreign countries
  • Exports of spreads last year fell by a quarter, being engaged in such trade became unprofitable
  • Exporters are looking for the possibilities of exports of spreads in poor countries in Africa and Asia
  • During 2009-2013 Ukraine bought a huge amount of butter and milk fat from abroad
  • Since 2014 imports of butter suspended, but not for long
  • In mid 2016 exports of butter showed a record-low prices over the past decade
  • Within three years, the oil price will double
  • Despite the crisis the world production of butter increase
  • Consumption of butter in the EU is 4.4 kg / person / year
  • For two years the world price of butter dropped almost half
  • Russia remains the largest importer of butter despite the sanctions and the closure of markets of the countries that had been traditional suppliers
  • Belarusian and Russian producers (due to sanctions) were able to significantly increase production of butter
  • In the world rating of the world butter exporters Belarus is ranked second after New Zealand
  • Kazakhstan remains the major importer of butter

This report contains 104 figures (charts, graphs, maps), 18 tables and the detailed market analysis, as well as forecasts of further development of the market of butter and spreads.

Volume 118 pages
Price: negotiable

Contact:
Vasyl Vintonyak
Director INFAGRO
e-mail: vvd@infagro.com.ua
tel: +380 44 252 2502

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