February 22, 2011

 

Union of Dairy Companies expects dairy products' prices to grow

 

 

The Union of Dairy Companies expects the prices of milk and dairy products to grow, said Vadym Chaharovskyi, chairman of the board of directors of the Union of Dairy Companies.

 

"Price hikes should be expected," Chaharovskyi said.

 

Vadym Chaharovskyi said the prices will grow by the inflation rate or higher. The producers will also include higher prices of energy in the price of milk and dairy products.

 

According to him, the enterprises project 10-percent growth in prices in their financial plans for 2011.

 

The expert notes that the pricing process in Ukraine depends on the world trends. The developments in the world markets indicate that the prices of milk and raw materials will continue to grow.

 

Vadym Chaharovskyi also expects tougher competition on the market of milk materials in Ukraine, as the government does not take practical steps to improve the situation, including steps to create equal conditions to all market participants.

 

He urges the Cabinet of Ministers to introduce compulsory certification of mediators that purchase milk from private households, as the case is for producers of milk and processing companies.

 

He said the methods of questionnaire used by the State Statistics Service do not allow reliable data on production of milk at private households.

 

"We must confess: we do not have the amount of milk reported by the State Statistics Service, because the Ukrainian raw material is more expensive that the European raw material," he said.

 

The expert sees promising perspectives in creation of milk production cooperatives in the conditions of the deficit of milk.

 

Earlier, the law on the 2011 national budget envisages UAH2.03 billion (US$255.25 million) in subsidies to producers of milk and meat selling their products to processing enterprises against accumulated VAT.

 

According to the Tax Code endorsed by the Verkhovna Rada on December 2, 2010, processing companies until January 1, 2015 will pay VAT on sales of milk and dairy products, meat and meat products to a special fund and will be used to pay subsidies to producers of milk and meat.