Milk price to continue rising

According to Miklós Istvánfalvi, chairman of the Milk Product Council, this year has brought major changes for milk producers. Prices have begun to rise. In July for example, these were 3 per cent up compared to the preceding month. High fodder and fuel prices, a decrease in supply from Australia and New Zealand, declining livestock in the EU and the reform of relevant regulations all contribute to the rise in prices. The trend is expected to run out of steam around 2010, but no major recession is foreseen. In accordance with its obligations towards the WTO, the European Commission has proposed to reduce subsidies for the export of cheese and butter to zero. Hungarian exports of cheese have been in rapid decline since our accession to the EU. On the other hand, there is a boom in the import of cheese, with imports accounting for a third of the market. We have seen a 9 per cent rise in the price of domestic milk till July. Export of milk to Italy continues to grow, with a prompt price of HUF 100 offered. The Hungarian milk industry is struggling to purchase unprocessed milk, and is expected to be offering HUF 80 for a litre by the end of the year. In the consumer market, the price of yoghurt has risen at the fastest rate, while the prices of some others have fallen. However, the price of dairy products will continue to rise. According to data about the first seven months of the year, the average price offered for milk by the industry has been 65.97 per kilo, which is 7.25 per cent more than it had been a year earlier. The quality of 99 per cent of the milk offered for sale in Hungary complies with EU standards. Domestic sales have been 10 per cent lower than a year earlier. One out of three litres or kilos of milk, cheese and curd are imported. Already low sales of butter have dropped by 30 per cent. The basic problem for the dairy sector is that regulation does not work adequately. Huge quantities of inferior quality milk are imported, and the overwhelming market influence of retail chains renders suppliers of milk unable to protect their interests.