In the first year of the full-scale russian invasion, Ukraine increased its exports.  Last year, it significantly decreased.

Previously, Infagro analysts predicted a decrease in the volume of exports of dairy products in 2024, but now there are reasons to revise these forecasts. Unfortunately, the growth rate in the consumption of dairy products is lower than expected, and the volume of milk processing is increasing significantly.

Under such conditions, the export of dairy products should be at least not less than last year, even if imports are increasing. For an average balance, it is necessary to export about 0.6 million tons of dairy products (equivalent to raw milk) from the country, or 18% of the total volume of processed milk.

But you can still change. Thus, in the first half of the year, exports in monetary terms are still lower than last year, but this happened only because of a noticeable decrease in the price of the leading export goods compared to the first half of 2023. However, last year, export prices continued to fall in the second half of the year, and this year, there is a basis for forecasting higher prices in the corresponding period. Therefore, according to the results of 2024, and in monetary terms, export indicators may be higher.

In the first half of 2024, compared to the same period of 2023, the export of dairy products in monetary terms decreased by 4% to 160 million dollars. If we compare external sales in 2024 with the pre-war year 2021, these sales are lower by 7%.

In the current year, compared to the previous year, in the first half of the year, the most significant decrease in export volumes is several times: butter was exported almost twice as much, to 2.5 thousand tons, and cheese products by 17%, to 4.7 thousand tons. Somewhat lower export figures are for ice cream and dry whole milk.

There is a noticeable increase in the export of products in the category of fresh dairy products (by 22% to 8.8 thousand tons), canned milk (by 18% to 5.6 thousand tons), whey (by 50% to 11.4 thousand tons), cheese (by 7% to 3.2 thousand tons) and casein by 8% to 3.6 thousand tons

In monetary terms, indicators differ due to significant price changes. For example, the weighted average price for casein in the first half of the year was 14% lower than last year. As a result, with increased physical volumes, export revenue was 7% lower. Whey and cheese products were much cheaper this year. Butter was 20% more expensive, which somewhat equated to a significant decrease in exports several times.

In the second half of the year, vegetable prices will not be lower than last year, so the revenue should be higher.

Except for exports, the import of dairy products in the first half of the year increased compared to the same period in 2023; in monetary terms, there was an increase of 6% to 135 million dollars. Unlike the pre-war year 2021, the indicator is still lower than exports. The growth was mainly due to the active import of butter at the beginning of the year; more than 1.1 thousand tons of it were imported in the first half of the year, and 530 tons of milk fat were bought.

Imports of cheese (hard/semi-hard and white) also increased, but only by 4% to 12.9 thousand tons. Its prices were slightly lower, so its purchase did not significantly increase foreign exchange purchase costs. It should be remembered that cheese is the basis of all imports. In the overall structure of milk product purchases in monetary terms, its share in the year’s first half was about 65%.

There were fears that the increase in the import of cheese this year would be more significant due to the rise in the price of the domestic product. However, this did not happen due to the devaluation of the hryvnia and difficulties with implementation in Ukraine. Importers are pretty cautious about increasing purchases. Therefore, there is hope that the cheese import in 2024 will still not exceed last year. Domestic producers are also pleased by a noticeable decrease in the volume of foreign purchases of fresh dairy products; in the first half of the year, the indicator decreased by a quarter to 6.5 thousand tons.

So, in 2024, contrary to pessimists’ expectations, Ukraine will remain a net exporter of dairy products in terms of milk and monetary terms.