Currently, the manufacturers who can steadily sell their products are mainly those who are willing to make significant price reductions, reports Infagro. Usually, these are companies that lack working capital. However, the current price level is unprofitable for most producers operating in the butter segment alongside skim milk powder or casein.
After active summer exports, the warehouses of enterprises began to fill up, and the sale of products within the country is becoming increasingly difficult.
The rising cost of raw materials is making production less profitable: the purchasing prices for milk necessary for break-even remain unattainable for most enterprises. In late October, a noticeable decrease in block butter prices was observed. Producers of packaged products maintain somewhat better positions, but competition in this market is intensifying. To increase sales, companies are forced to offer promotional discounts, which negatively affects profitability.
Deterioration of production conditions
The Ukrainian butter market is experiencing a difficult situation due to overflowing warehouses, deteriorating production conditions, and decreasing profitability for most producers. The price level of products forces companies to make significant discounts, which negatively impacts their profitability and competitiveness.