Ukraine’s dairy imports are not just growing — they are systematically displacing domestic producers. As RBC Ukraine reports, dairy product imports rose 21% in the first five months of 2026, and the sector’s trade balance has turned negative.

Poland now holds 42% of Ukraine’s dairy import value. Polish dairy exports reached €3.9bn in 2025, making the country third in the EU after Germany and the Netherlands. Ukraine’s cheese trade deficit stood at -$85.7m in January–May 2026 alone. According to USDA data, Ukraine produced 139,000 tonnes of cheese in 2025 but imported 42,300 tonnes — 65% of all dairy imports. Annual domestic consumption is estimated at 150,000–170,000 tonnes.

Import growth by category in January–May 2026 vs. the same period 2025: whey +100%, casein +86%, butter +56%, fluid milk and cream +55%, yoghurt and fermented products +22%, cheese +9%.

The structural gap is clear: Ukraine exports cheap commodity products — powder, butter, casein — while importing high-value finished goods. Polish processors converted cheese by-products into whey protein concentrates and functional ingredients for sports and infant nutrition, commanding around €3,000/tonne for whey. Ukrainian whey sells mostly as raw material at €1,560–1,700/tonne.

The disparity stems from unequal conditions: Polish processors modernised on €1–2bn in EU grant funding. Ukrainian plants borrowed at 18% commercial rates. In the EU, spot contracts account for under 10% of the milk market; in Ukraine, 100% of milk is traded on spot. Ukrainian raw milk prices have fallen to UAH 13.50–14.50/litre — below levels at which most small and medium farms are profitable.

On the export side, the EU reintroduced quotas on powder, butter and condensed products from June 2025. Asian markets remain closed behind regulatory barriers — veterinary accreditation, plant registration and country-specific halal certification all required before any FTA can translate into actual shelf presence.

Ukraine still has structural advantages — 50% of milk is produced by medium and large operators, and domestic potato production fully covers consumption. But unless productivity gains are converted into long-term contracts and deep processing capacity, the country risks following Bulgaria’s path: a dairy tradition slowly displaced by import dependency.

Source: RBC Ukraine