Butter Prices Reach Record Levels

Total Croatia News

Once a staple food, butter is becoming a luxury item.

Europe used to be drowning in butter, but now the prices have reached record heights, and there are shortages as well. Since it was declared to be more healthy than previously thought, butter has been a favourite of Croatian consumers in recent years as well. But, now many are wondering whether they will be able to buy enough of it for the coming holiday season, reports Večernji List on November 1, 2017.

Last year, you could buy 250 grams of butter at shopping centres for just 9.99 kunas, while this year you have to pay between 18.99 to 26.99 kuna, so it is no wonder that there has been a fall in consumption by about 15 percent. Still, according to Branko Bobetić, the director of Croatiastočar, an organisation which gathers the biggest players in the Croatian dairy industry, the prices could soon decline, at least somewhat.

After the Russian embargo on agricultural and food products from the EU, the market has been flooded with excess milk powder and butter. Last year, the EU market had 132,000 tons of butter in warehouses, given that Russia used to be the primary export market for European cheese and butter. But, in the first half of this year, the butter production fell by seven percent, and the warehouses were soon empty, which led to the dramatic increase in prices, Bobetić explains.

In addition to this, the growth of sales to other markets, such as China, which has discovered the advantages of butter and consumes it in ever greater quantities, is also important. In the first quarter of this year, exports of European butter to China increased by 457 percent over the same period last year, so China already accounts for 20 percent of EU butter exports. “Still, the price of butter has already started falling in the EU, so in the case of further market consolidation we can expect prices to fall in Croatia as well,” said Bobetić.

Marijan Vučak, the CEO of Meggle Croatia, said they were also monitoring the current trends of falling prices in Europe. But, it is difficult to tell if it is a long-term or a short-term trend. “The shortage of milk, and thus cream, has spread to butter as well, as the end product. We will know a true situation in a few weeks,” said Vučak. “Due to the chronic shortage of milk, which can cover just a half of the market needs of Croatia, we do not really have enough milk to produce any butter at all,” added Bobetić.

A silver lining is the fact that an average Croat eats only two kilograms of butter annually since otherwise, it would probably be even more expensive. The average in the EU is 4.3 kg. “In 2016, butter consumption in the EU was 2.2 million tons, while in Croatia consumption was 6,500 tons, of which we produced 4,000 tons, imported 3,000 tons, and exported 500 tons,” added Bobetić.

In the EU, as much as 10 percent of milk is processed as butter, while the share in Croatia is just four percent. In the first six months of this year, Croatia imported 1,300 tons of butter, mostly from Austria (550 tons) and Denmark (376 tons). The average price of imported butter was 4.50 euros, while last year it was three euros.

Translated from Večernji List.


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