The decline in milk prices is unfavorable for companies in Hungary who have interests in the low-risk dairy market.
Coface notes that the milk market changed significantly in April as the milk quota system, which had been in operation since 1984, was abolished. As such, prices and the sectors performance are determined solely by market processes. Coface added that thirty years after the milk quota system was introduced, milk production grew by 56%.
Coface also said that in the period of 2008-2013, milk consumption in the European Union dropped by 2%, and the growth in the milk market was instead the result of exports during the period. The leading milk producer in the EU is Germany, providing 22% of total production. France is second with 17% and the United Kingdom is third with 10%, while Hungary ranks sixteenth.
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