Raw milk shortage hits volumes

Raw milk shortage hits volumes

Ukraine dairy group Ukrproduct saw its sales volumes fall in 2009 due to a “significant” shortage of raw milk in the second half of the year.

The producer and distributor of branded dairy products said it witnessed a material slowdown in the Ukrainian economy last year and, as a result, total volumes were down 2.1% to 28,250 tonnes.

Branded product volumes dropped 17.5% to 19,292 tonnes.

Sergey Evlanchik, CEO of Ukrproduct, said: “Sales volumes of butter, Ukrproduct’s largest product group, were below the previous year.

"However, volumes were up in the second half compared to the first half of 2009. The group was able to push through price increases in butter and processed cheese in November and December and the average price for branded products increased by 22.3% year on year.”

Ukrproduct said it expects profitability in the second half of 2009 to be “significantly below” the first half of the year following the sharp increase of raw milk prices which has impacted margins.

“We believe that we have the right strategy for this market and expect to successfully come through this challenging period,” the firm said.

Ukrproduct is expected to release its full-year results on 21 April.