This summer has been marked by high prices for butter on the world market, which is a unique situation over the past 10 years. At the same time, prices for other dairy products with a low fat content have changed minimally. Due to the balance between a significant increase in butter prices and a slight increase in prices for other dairy products, the purchase price of milk on the market has remained relatively high and in Latvia is kept at the level of 0.30 euros per 1 kg. In some countries of Europe it is higher. Forecasting when prices for butter start to fall is not yet possible, said Janis Sholks, Chairman of the Board of the Latvian Central Union of Milk Processors (LCMC).
Fresh milk contains only about 4% of milk fat, of which you can make butter or other kinds of fat-rich food – cream and sour cream. Therefore, in spite of rising prices for butter, it is impossible to pay farmers more for their milk, since the price of fresh milk depends on prices in the global market, he explained.
The situation on the dairy market in Latvia as a whole remains stable, despite seasonality, rising prices for dairy products and a decline in the population. According to official data, the consumption of milk per inhabitant of Latvia this year has increased slightly. The volume of imports of dairy products this year compared with last year did not change significantly.
The export of dairy products from Latvia could slightly increase this summer, Sholks said, pointing out that the official data has not been yet generalized.
Sooner or later, the “soap bubble” of the price of butter in the world market will burst, and if the prices for other dairy products do not change by that time, it is possible to reduce the purchase prices of milk, the chairman of the board of the Latvian Central Union of Milk Processors Janis Sholks told LETA .
According to the Latvian Traders Association, the average price of butter in Latvia in March 2016 was 7.9 euros, in March 2017 – 8.55 euros, and in August – 13.1 euros per kilogram.
The Competition Council concluded that the rise in prices for butter was due to global trends, an increase in the cost of its processing due to limited availability of raw materials and margins of retailers.
