Ban on imports of Ukrainian cheese to Russia to lead to slight fall in prices of cheese, milk, say experts
Kyiv, February 28 (Interfax-Ukraine) – The expansion of the list of Ukrainian companies banned from supplying cheese to the Russian market by Rospotrebnadzor will lead to a slight fall in the prices of cheese and milk in Ukraine, according to experts of the dairy market.
"[The prices of milk] will fall, but it will not be an absolute and deep [fall]. As for cheese, it will be a short-term fall, to sell stocks that were intended for sale in Russia," Milkiland-Ukraine Board Chairman Anatoliy Yurkevych said at a press conference at Interfax-Ukraine on Monday.
He said that domestic purchase prices of milk started falling in the middle of February in the regions where the three cheese-making companies, the products of which were banned by Rospotrebnadzor, are located. Yurkevych said that now after the expansion of the said list, the price of milk would start falling in other regions.
Deputy Agricultural Policy and Food Minister Oleksandr Sen said at the conference that the ministry has not obtained official information on the expansion of the list of the companies that are not allowed to export to Russia. He said that Ukraine would settle the situation with cheese supplies to Russia very quickly. He said that the expansion of the said list would affect the Ukrainian domestic market. Sen said that only recently purchase prices of milk bought from the public fell from UAH 2.5-2.7 per liter to UAH 2-2.1 per liter.
The director of Agroproduct LLC, which produces milk, Volodymyr Khvostov, said that the fall in the purchase prices of milk was a catastrophe.
"[The fall in the purchase prices of milk] is a catastrophe for producers. Without the cheese segment, processors would not be able to increase the price of milk," he said.
President of the Association of Milk Producers of Ukraine Andriy Dykun said that at present milk prices are being reduced on the sly even by those companies that do not produce cheese.
"Even those who do not produce cheese reduce on the sly the price. This could lead to cows being slaughtered," he said.
Sen said he hope that processing companies that do not produce cheese would not reduce milk prices. He said that otherwise local authorities would intervene in the situation. He also expressed hope that a mechanism of paying subsidies for selling milk for processing would minimize the impact of the fall in the milk prices.
Board Chairman of the Union of Dairy Enterprises of Ukraine Vadym Chaharovsky said that the market will regulate everything itself and administrative measures should not be applied.
"We always find a common language [with the milk producers] on milk prices," he said.
The experts also said that when companies sell stocks of cheese meant for Russia its price on the domestic market will remain stable. They said that Ukraine produces high-quality dairy products, including cheese. Yurkevych said that Ukrainian cheese is sold in Russia at higher prices than Russian, Belarusian or German cheese, so it is often counterfeited.
As reported, on February 27, 2012, extended the list of Ukrainian companies whose cheese will not be allowed into Russia.
Apart from Prometei in Chernihiv region, the Pyriatyn dairy plant in Poltava region and Hadiachsyr in Poltava region, now the Bashtan and Lozovsky dairy plants, Bel Shostka Ukraine and Khmelnytsky plant have been added to the list.