World prices for dairy products have reached their highest level in almost seven years.

This is evidenced by data from the specialized New Zealand trading platform Global Dairy Trade (GDT).

At the end of the first trades in February, the price index at the global dairy auction increased by 1.8% and reached 1136 points.

The value was the highest since May 2014.

The average price for dairy products was $ 3.61 thousand per ton.

Most of all, skimmed cream rose in price - by 10.7% (to $ 3.18 thousand per ton), butter - by 6.2% (to $ 5.03 thousand), whole milk powder - by 2.3% ( to $ 3.46 thousand), as well as cheddar cheese - by 2.3% (up to $ 4.18 thousand).

It is noteworthy that world prices have been growing continuously over the past three months.

At the same time, in the first half of 2020, the cost of dairy products in the world, on the contrary, showed a decline.

So, in May, the GDT index dropped to 893 points - the lowest level since December 2018.

As the managing partner of the Agro & Food Communications agency Ilya Bereznyuk told RT, for the main part of 2020, dairy products in the world fell in price amid the consequences of the coronavirus pandemic.

First of all, we are talking about the introduction of quarantine measures and the closure of borders in most states.

“When the lockdown began in the countries - the leading producers of milk and dairy products, consumption also dropped dramatically.

In particular, this happened because a large segment of dairy products is involved in the hotel and restaurant business, which practically ceased operations during the pandemic, ”the expert explained.

However, as the restrictions eased, global demand for dairy products began to gradually recover.

As a result, the cost of goods also began to rise - since the beginning of November 2020, the GDT index has added almost 20%.

“In general, in recent years, the consumption of 'milk' has significantly increased in the world, mainly due to the growth in the number and well-being of the population in Southeast Asia.

It also affects foreign markets and leads to higher prices, ”added Bereznyuk.

Note that from 2006 to 2018, the volume of imports of dairy products by the countries of Southeast Asia increased by 66% and reached $ 6.3 billion. These data are cited by the US Department of Agriculture.

In addition, the observed increase in the cost of dairy products in the world is due in part to the reduction in global supply.

This point of view, in an interview with RT, was expressed by the director of the Center for the Study of the Dairy Market, Mikhail Mishchenko.

“Last year, production growth rates were among the lowest.

This is due to the fact that manufacturers' concerns about the coronavirus began to grow even before the introduction of quarantine measures.

Also, numerous fires around the world and other natural disasters had a negative impact on production, ”the expert explained.

Business approach

As Ilya Bereznyuk emphasized, at the moment, dairy producers are still suffering losses due to the ongoing pandemic.

In these conditions, many companies in the world industry are trying to compensate for financial losses by increasing the cost of their products.

It is curious that against this background, Russian producers, on the contrary, restrain the growth of prices for milk, experts say.

According to Rosstat estimates, by the end of 2020, dairy products in Russia have risen in price by an average of 3.6%.

At the same time, the inflation rate in Russia amounted to 4.9%, while food prices increased by 7.2%.

“In 2020, the cost of dairy production has grown dramatically - by about 8-10%.

As a result of fluctuations in the foreign exchange market, prices for processing, equipment and services rose.

Meanwhile, producers were squeezing their profits, since a noticeable increase in prices for a product that occupies one of the leading positions in the basket of the Russian consumer could cause negative social consequences, ”Ilya Bereznyuk explained.

In addition, dairy enterprises were guided by economic considerations, Mikhail Mishchenko is sure.

Thus, a sharp rise in the price of products could put additional pressure on demand from citizens in 2020.

“It would be wrong to raise the price of a product during a crisis, when people's incomes have already dropped.

It was more important to maintain demand, ”the specialist noted.

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However, as the Russian economy recovers in 2021, national producers may still begin to gradually increase the cost of dairy products, experts say.

According to Mikhail Mishchenko, the actions of enterprises will largely depend on the dynamics of prices for electricity, fuel, feed additives and veterinary drugs.

At the same time, experts do not expect a serious rise in prices for dairy products in Russia.

According to Ilya Bereznyuk, if necessary, the government can introduce special measures to contain prices.

In particular, the authorities have the ability to limit the growth in the cost of electricity and other utilities or partially compensate farmers for the costs of doing business.

“With a favorable development of events, and this is a stabilization of the exchange rate and a competent policy in relation to utility providers, in principle, prices can be contained. Perhaps, the cost of dairy products can be kept at the same level and reduced for certain categories, ”the expert concluded.