The tendencies of world markets affect negatively the Ukrainian market. 

War of Russia with Ukraine portends abnormal development of dairy business.

There is decline of prices on some markets (mainly in Europe). At the same time they increase in other countries (basically in Latin America) which intend to trade more actively with Russia.

Russia is completely closed for export from Ukraine. Belarus still allowed to some companies to purchase the products until recently. In the end of last week it was punished by Rosselhoznadzor for that. In general, the commodities were stopped on a border and it is not known whether they will go further. Kazakhstan buys dairy products from several Ukrainian plants. All Ukrainian exporters try to sell somehow the products to other CIS countries, but supply is too big, demand is low. That prevents formation of normal prices. Situation with deliveries to far abroad is even worse. For example, western traders already value Ukrainian milk powder at USD 1000 lower prices, than one month ago because of collapse of European market.

In general, Ukrainian producers are absolutely not ready to work without Russian market. Alternative commodity markets have not been found yet. Officials promised to favour the development of trade with China, but permissions for deliveries have not been received yet. Other potential importers are not interested in purchases of Ukrainian dairy products.

As a result the production of dairy products is essentially reduced in Ukraine Even seasonal reduction of milk yields does not rescue from its surplus. The prices do not grow any more even in conditions of the next devaluation of the UAH.

If situation is not improved, the number of cows will be considerably reduced by winter. Hope for fast improvement is very weak. Ukrainian will hardly be permitted to return to Russian market this year. That may happen in intermediate prospect, but only under condition of import duty taxation. President Putin warned once again about that in recent meeting in Minsk.

Fast devaluation of the UAH will be one of the reasons of considerable decrease of buying power. It will not be possible to increase internal sales.

In general, domestic dairy producers are in desperate situation now.

Source: infagro.com.ua