The market of butter and spreads – 2018

Recently, the situation on the market of butter and spreads has dramatically changed. Ukraine was again recognized as one of the world’s largest suppliers of butter. Such growth occurred because of the forced redirection of raw milk surplus that appeared after embargo imposed by Russia, on production of alternative dairy products and, above all, butter. There appeared a huge surplus of butter for exports.

Exports grew also due to the significant reduction in butter consumption in the country. Earlier, in Ukraine when consumption of butter were decreasing, sales of spreads were increasing. In recent years, the demand for spreads has declined both in the domestic market and in the exports countries. As a result, the output of this product in two years decreased two-fold.

It is supposed that in the coming years, after a significant collapse, the market of spreads will be growing,  but the growth of butter production is likely to stop. We should expect a gradual decrease in exports and possibly even resumption of imports.

Thus, the current conjuncture of the market of butter and spread  forces market operators to look for effective ways of doing business. The report prepared by Infagro will simplify the fulfillment of this difficult task.

The main topics:

  • Production
  • Consumption
  • International trade
  • Price trends
  • Features of the world market
  • Features of the market of the countries of the Customs Union
  • Conclusions and recommendations

In brief:

  • The geopolitical and economic crisis has radically changed the situation in the Ukrainian market of butter
  • Butter has again become one of the main products in the dairy industry in Ukraine
  • Almost a third of all milk supplied for industrial use is used for production of butter (combined with SMP and casein)
  • In late 1980s, more than 300,000 tons of oil was produced annually in the Ukrainian SSR
  • In 2009-2011, Ukraine produced only 62-66 thousand tons of butter
  • Since the beginning of the crisis, the production of butter has grown significantly. According to the State Statistics Committee, the volume of production is 100-108 thousand tons. According to Infagro estimates, it is 80-88 thousand tons per year
  • The significant increase in production of butter was achieved solely due to the increased output of cheese products
  • In the future, production of butter will decrease
  • Producers switch to high-fat butter
  • More than half of the total butter production is made by ten companies
  • From 2000 to 2007 production of spreads increased by 7.5 times
  • Over the past five years, production of spreads and vegetable-cream mixtures has been halved
  • Five companies produce three-quarters of the total spreads and vegetable-cream mixtures in the country
  • Last year, butter consumption fell to a record low. The main reasons for the drop in consumption are high prices and labor migration
  • In 2017 in Ukrainian market  there were sold half as much spreads and vegetable-cream mixtures as in 2012
  • From 2009 to 2013 Ukraine was considered as net importer of butter
  • In 2017, Ukraine again entered the top-10 of the world’s leading exporting countries of butter reaching a record high for the period since 2004
  • Exports of butter bring about a quarter of foreign exchange earnings from the external sale of all dairy products
  • Ukraine exports three quarters of butter to non-CIS countries
  • Exports of spreads for the period 2013-2016 decreased by half, but last year it started to grow again
  • In 2016 exports of butter were at a record low for the last ten years. In 2017, the commodity has risen in price by 60%
  • Ukrainian butter is still undervalued by Western traders, often the difference in the world and Ukrainian export prices reaches 25%
  • World production of butter exceeded 11 million tons per year
  • India and the EU account for up to 60% of the world butter production
  • In France consumption of butter is 8 kg/person/year, in US only 2.6 kg
  • In 2017 world prices for butter reached a record high
  • China in 2018 will become the world’s major importer of butter
  • Russia, as an importer, will cede the absolute world championship to China, but will still purchase huge amounts of butter
  • Thanks to Russia’s sanctions, Belarus has been able to significantly increase production of butter, but this yearit was too much of Belarusian butteron Russian market and  Russia imposed import restrictions
  • Kazakhstan will remain a major importer of butter. Almost half of butter in the country is imported.

The report contains 97 figures (diagrams, graphs, maps), 21 tables and detailed analysis, as well as forecasts for the further development of butter and spread markets.

Volume 117 pages.
Price negotiable

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