Both the demand for butter and butter prices are falling quicker than the increase of production. This situation was predicted long ago, but it was hard to expect that the decline would be so sharp. Butter price has plummeted 20% last month.
It looks like the price for this product will further decline until it becomes attractive for importers. Now western traders value Ukrainian 82% butter at about USD 2400/t. Psychologically sellers are not prepared to sell the product at that price and try to find buyers in Post-Soviet States.
It is still possible to sell 82% butter at USD 2800-2900/t there. 72.5% butter fell in price to USD 2400-2600/t. Now it is very difficult to keep the prices even at that level, as there are many operators wishing export the product to CIS and the market is small. Even considering quite high local price, export of butter grew almost up to 500 t last month.
Despite the falling prices of the external demand, export will grow considerably and quickly. The majority of producers have no extra finance to work for stocks.