The step to the Trade War. What will happen if Ukraine forbids the import of Polish milk

This is stated in Forbes with reference to the words of Minister of Agrarian Policy and Food Mykola Solsky. First of all, they can restrict or prohibit the import of Polish dairy products and fruits into Ukraine. It is one of the quite large articles of Polish exports to Ukraine. "We are for constructive, but of course we will be ready to respond," said Minister of Agrarian Policy and Food Mykola Solsky. He noted that it is too early to discuss the details.

The Ukrainian authorities still think what restrictive measures will be implemented. It is likely that the ban on fruits and dairy products will only be the first step. "This is a subtle topic while commenting on nothing . . . We will be active in negotiation with the Polish side, and on the basis of their effectiveness, we will make a decision," - added Solsky. "A few years before the full-scale invasion of oil in Ukraine increased only in some periods.

However, traditionally Ukraine was a large exporter of oil. After a full-scale invasion of oil in foreign trade in domestic milk, they intensified, in particular in 2022," Association of Milk Manufacturers Anna Lavrenyuk. She also explained the reasons for this intensification.

According to Lavrenyuk, 2022 significant forced outflow of Ukrainians from the country and reducing the internal consumption of fresh dairy products (ie milk drinking, kefir, sour cream, yogurt), as well as significant logistical problems with dairy products to trade networks forced plants Products that have a long storage period: butter and dry milk.

"Due to the favorable situation in the foreign market (since the second half of 2022, the demand for oil has increased in the world), all warehouses of oil have been successfully exported by our producers. In fact, the industry has withstood the most shock 2022," Anna Lavrenyuk explained. It should be noted that in 2023, the share of oil in the total import of dairy products to Ukraine was only 6. 3% (in terms of raw materials).

Although there were significant losses of the number of cows and production facilities due to the war, dairy farms were able to put as much raw materials in the processing plants as a pre-war 2021. "So we can argue that restriction of butter imports from Poland will not cause its shortage on the shelves of Ukrainian stores," the expert said. Indeed, the deficit is not at this time. However, now the fate of dairy exports is declining, while the import of milk, including butter, is increasing.

The figures provided by the expert-analytical service of the Union of dairy enterprises of Ukraine say this. In particular, it is said that total foreign trade in dairy products in January-2024 ($ 36. 9 million) decreased by 13. 2% against December-2023 ($ 42. 5 million) and practically corresponded to November-2023 ($ 37. 4 million). In January-2024 ($ 12. 6 million), dairy exports decreased against 6. 8 %of December-2023 ($ 13. 5 million). In addition, they were smaller than November-2023 by 3. 6%.

"Exports of dairy products in January-2024 were the lowest since March 2022, the first full month of full-scale Russian invasion of Ukraine. This was a consequence 2023, as well as through blocking of exports from Ukraine agro-food, including dairy, products. As a result, for the fourth month in a row (October-2023-January 2024) the cost of importing dairy products to Ukraine is almost twice the cost of their exports from Ukraine, " It is in the study.

In the first month of 2024, importers imported more oil by 55% compared to January 2023 according to analysts, a significant decrease in exports of January-2024 against January-2023 was recorded on such a position as "butter" (3. 4 times). But the volume of dairy products in January-2024 ($ 24. 3 million) increased against the level of January-2023 more than one and a half times (by 55%). And here a significant increase in imports was recorded on the position "butter butter" (13.

6 times) and "cheeses of all kinds" (1. 5 times). That is, for the first month of 2024, importers brought more oil by 55% compared to January 2023. "Thus, as a result of a shortage of milk-raw materials and rapid rise in price in the last months of 2023, Ukraine significantly reduced export activity in January 2024,"-reported in the Union of Dairy Enterprises of Ukraine.

According to the AVM director, the statement of the Minister of Solsky on the possible prohibition or restriction of dairy products from Poland to Ukraine is logical and fair. After all, protests of Polish farmers are becoming more uncontrollable and bold, and the lack of any legal reaction of the Polish police or authorities to a gross violation of international law force our politicians to take a more stringent position.

At the same time, the expert of the Economic Discussion Club, Oleg Pendzin, rejects the possibility of banning Ukraine with a Polish product, but warns of a serious problem with milk and raw materials, which Ukraine is actively purchasing in Poland. "There will be no ban. We will not fight with the Poles. To date it is nothing more than a warning measure. This is such a hint of mirror reactions. The Poles also did not ban Ukrainian oil. They only block the borders. We really have.

A serious situation is in rising raw materials prices. And this affects the price of the Ukrainian agricultural product. The biggest problem is that we import from Poland, and we bring milk and raw materials and hard cheeses from Poland, "the economist explained. He also highlighted the problem of reducing the production of raw materials in Ukraine. "A large enough amount of raw materials is produced in the farms of the population.

People today have dramatically reduced the total production of raw materials due to lack of labor. We understand that mobilization has walked hard in the villages, the total number of people who actually work in agricultural business have decreased. As a result , we have a decrease in offers. This, by the way, applies to pig meat, because the very large fate of pork was produced in households. This provokes rising prices for dairy products.

Products until the animals are transferred to open retention. And it will be in the weather, sometime in April. By April we will have an increase in prices for milk production, " - said the specialist focus. According to Pendzin, the rise in milk prices is not at the rapid rate as in early 2024. But the process is still ongoing. "And it will continue. The rise in prices awaits us in April. And now we have an increase.

It can decrease a little because in January there were holidays - there is increasing demand before the holidays, in particular, and for animal fats. As a consequence, in January The rise in prices was higher. But this does not mean that prices stopped and started rollbacks. Just the dynamics decreased a little, "Pendzin added.

Due to the blocking of the border of the enterprise, oil will not be exported to export, which means that they will try to implement within Ukraine, however, currently considering the data of the Union of Dairy Enterprises of Ukraine, retail networks are unlikely to overstate the cost of oil. After all, because of the blocking of the border of the enterprise, they cannot export it for export, which means that they will try to implement within Ukraine.

That is, it is not necessary to calculate the sharp rise in price of dairy products at the end of February and March, although the rise in prices will occur, in particular, as Oleg Pendzin noted above, because of a certain shortage of milk-raw materials, which is now too difficult to import from suppliers from Poland. Meanwhile, according to the Union of Dairy Enterprises, the Global Dairy Trade (GDT) dairy price index slowed down the pace, but it increases: on February 20, it added 0. 5%.

In particular, dry skim milk went up by 1. 3% to $ 2788/ton, and butter - 0. 1% to $ 6526/ton. As for the price of milk and raw materials, it has increased from mid-2023. As reported in the Union of dairy enterprises of Ukraine, in the second half of last year, prices for milk and raw materials increased significantly-both in UAH and in terms of euro. In December, they exceeded the level of 15 UAH/kg, while in July they amounted to an average of 11. 6 UAH/kg, that is, an increase of 30%.