Main points
- China has imposed additional tariffs on European cheeses, which will make them less competitive in the Chinese market, forcing producers to look for new markets, such as Ukraine.
- In Ukraine, European cheeses may increase imports, as they already occupy 60% of the hard cheese market, which may lead to a decrease in prices for dairy products in general.
Cheese from Europe will flood Ukraine / Photo Pixabay
China has imposed additional duties on cheese imports from the European Union, which could significantly change the situation on the global dairy market. As a result, European producers will likely be more actively looking for new sales markets, including in Ukraine.
Why are Chinese ears sticking out of streams of European cheese?
China recently imposed additional duties on cheese imports from the European Union, Serhiy Vovchenko, chairman of the supervisory board of the Dairy Alliance group of companies, told Minfin. This, he said, could make European products significantly less competitive on the Chinese market.
According to him, in recent years, European producers have practically displaced Ukrainian exporters from the Chinese market. One of the reasons was the increase in the price of raw materials in Ukraine.
Vovchenko explained that the share of raw materials in the cost of dairy products is about 65 percent. Because of this, Ukrainian producers began to yield to European companies in the price of exchange-traded dairy products by about 30 percent.
As a result, suppliers from the European Union significantly increased their shipments of dairy products to China. This caused dissatisfaction among local producers and became the basis for launching an anti-dumping investigation.
China has imposed tariffs against the EU, which will also hit Ukraine
According to Vovchenko, the new duty rates, which are already approaching 30 percent for cheeses, could significantly limit the ability of European companies to operate in the Chinese market. As a result, the volume of supplies to China could decrease sharply.
In such a situation, EU manufacturers will likely be more actively looking for alternative markets. One of them could be Ukraine, where duty-free access is available for European products.
Vovchenko warns that this could lead to increased imports of cheap cheeses from Europe. Hard cheeses from the EU already account for about 60 percent of the Ukrainian market.
In addition, a surplus of products may arise on the European market itself. This could lead to a decrease in prices not only for cheese, but also for other dairy products, in particular butter and powdered milk, which Ukrainian companies actively supply to the European Union.
Pay attention! According to Vovchenko, this situation may also lead to a decrease in the price of raw milk in Ukraine. At the same time, he believes that if the price of raw milk remains at least at about 14 hryvnias per liter for some time, Ukrainian cheese producers will be able to stay on the market at least until the end of 2026.
Competition is intensifying: Poles want to sell their cheese on the Ukrainian market at a dumping price
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Polish suppliers plan to sell cheese on the Ukrainian market at dumping prices, which may complicate the situation for local producers.
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Ukrainian producers are forced to review their pricing strategy and intensify promotion to compete with cheaper imports, as the state program “Buy Ukrainian” may not be effective enough.