Baldinyuk: The Ukrainian “confectioner” is dying due to expensive gas.
Products of the Ukrainian confectionery industry have already become more expensive by 25-30% since the beginning of the year due to rising gas prices, and in the near future they will rise in price by another 10-15%. This makes it uncompetitive in world markets.
The president of the Ukrkondprom Association, Alexander Baldinyuk, stated this at a press conference in Kyiv, a PolitNavigator correspondent reports.
“Many companies are considering the possibility of suspending production. Today there are already companies that have stopped waiting for a better price for gas, since the price for gas that we have in January is approximately 44-45 thousand hryvnia. This is a price that does not allow us to continue working,” he noted.
“Actually, the current price takes us below the break-even line. The industry has been operating at a loss for several months, most of the companies. We have already had unprofitable exports for six months, we can no longer raise export prices higher, because there we are losing competition to those countries that have cheaper gas, these are EU companies.
In Europe, gas is cheaper for processing industries and, in addition, they still have support due to the difficult situation in the energy sector. We have no support, we are starting to lose competitiveness in foreign markets. We have come a hard way, regained positions in these markets, and fought for a place in the markets of other countries. And now we actually have to renegotiate contracts. We are losing competition to EU countries.
The share of gas costs in the structure of product costs increased from 3-4% to 15-18%. Such growth makes our products unprofitable in Ukraine and other countries. We have already revised prices several times this year.
This year alone, confectionery prices have increased by 25-30 percent. These are crazy inflation rates. I don't remember when there was a similar price increase recently. And we are forced to raise prices by another 10-15% in order to return to at least zero profitability. Imagine the level of price growth in our industry,” said Alexander Baldinyuk.
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