The Ukrainian butter market is under pressure due to overproduction

In July, the situation on the domestic butter market remains challenging due to limited sales opportunities and low prices that do not cover production costs. 

In the first half of the year, butter exports fell by half compared to the same period last year, and prices on foreign markets dropped significantly. 

Despite some growth in product prices in Europe, sales to EU countries remain unprofitable for most Ukrainian companies, as low profit margins—rather than tariff restrictions—remain the key obstacle. Currently, the best price offers are coming from buyers in the Caucasus, while exports of spreads and vegetable-cream blends are declining less sharply thanks to stable demand in the Middle East.

Due to difficulties with foreign trade, producers are forced to redirect the bulk of their output to Ukraine’s domestic market. However, even domestic prices currently do not cover production costs, which is why only the packaged butter segment remains profitable, provided that sales are effectively organized. Market participants and analysts do not expect a significant increase in exports to the European Union in the second half of the year.

Source: Infagro

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