Dairy consumption in Ukraine doesn't decrease despite decline in production – expert

Head of the board of directors at the Union of Dairy Enterprises of Ukraine Vadym Chaharovsky says dairy consumption in Ukraine has not decreased despite a decline in dairy production in 2019.

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"[Dairy] imports have swiftly grown this year. For example, Ukraine will officially have imported 20,000 tonnes of cheese by the end of the year ... The consumption market has not shrunk. But production has declined because under the new conditions, our producers have not found a solution to retain their consumers," he said at a conference, titled: "Dairy Business 2019," on November 20.

According to the expert, the annual consumption of dairy products in Ukraine is 185 kg per capita.

"Consumption has not decreased also because there are a lot of counterfeit products [on the market]. About 40% of creamery butter on our shelves is counterfeit," he added.

According to the forecast presented at the event, milk production in 2019, for the first time over Ukraine's independence, will be below 10 million tonnes, that is 9.7 million tonnes, and will shrink by 3.8% in general.

"We need investment and state support. The taxes paid by the sector actually overlap this support, so the state should not have questions where to take funds for the development of dairy cattle breeding. There should be targeted subsidies for dairy farming to prevent embezzlement," he said.

Chaharovsky also presented a strategy for reforming the sector, which, in particular, involves the creation of a new export line (innovative products, nondairy products, namely vegetable milk) and B2B products with nondairy substitutes for milk. The strategy also suggests giving up the production of exchange commodities, i.e. creamery butter and milk powder.

As UNIAN reported earlier, milk output in Ukraine shrank by 2%, to 10 million tonnes in 2018.

The national budget for 2020 provides for UAH 4 billion, or US$165.4 million, in aid for the agricultural sector.

The 2019 budget stipulates that UAH 5.7 billion, or US$235.6 million, should be allocated for the support of farmers.