Ukrainian cheese producers face the threat of losing a significant share of the domestic market due to the likely rise in imports, according to the industry analytical agency Infagro.
"The main reason for the increase in cheese imports is the price disparity between Ukrainian and European-produced products. Imported cheese is much cheaper than domestic," analysts explained.
In their opinion, the situation could be saved by two factors: price reductions by Ukrainian cheesemakers or a significant devaluation of the hryvnia.
The first option is unlikely, as producers have already moved away from using such sales stimulation tools. They will not sell traditional cheeses for less than 300 UAH/kg in the near future. However, the collapse of the hryvnia exchange rate could very well happen, given the war and the current state of the economy, experts believe.
"This is a future assumption, but right now we are observing a 50% increase in the import of rennet cheeses (hard, semi-hard, white) in December compared to December 2023, reaching 4.6 thousand tons. The supply of European processed cheeses increased by 28% in the same comparison to over 500 tons," analysts stated. They added that if the high import trend continues, European cheeses will take up half of the total cheese sales in Ukraine.
According to the industry agency's information, the cheese sector's results in 2024 were acceptable. The import of rennet cheeses increased by only 11% last year to 29 thousand tons, which is still almost a third less than in pre-war 2021. The import of processed cheeses in 2024 increased by 14% to 4.6 thousand tons, which is a quarter less than in 2021.
At the same time, Ukrainian producers in 2024 were able to increase exports of semi-hard cheeses by 9% to almost 7 thousand tons. Processed cheeses (including cheese products) were exported 4% less, at 4.2 thousand tons.
"Overall, domestic cheesemakers have much to think about. They need to do something to prevent imports from becoming as significant as in 2021. But back then, there were still many consumers, and now a significant portion of them are abroad or under occupation. Producers can, of course, hope for foreign trade, but increasing cheese exports will be extremely difficult. Logistics to post-Soviet countries remain quite complicated and expensive. Competing with European products on other markets will simply be impossible price-wise," Infagro concluded.
