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Lithuanian dairy product prices won't fall despite drop in milk purchase prices - analysts

VILNIUS - Analysts say dairy product prices in Lithuania are unlikely to go down in the near future despite a decline in raw milk purchase prices. 

Figures from the Agriculture Ministry show that raw milk purchase prices in the country last month averaged 257.1 euros per ton, down by 0.2 percent from July and down by 7 percent from a year ago.

Dalius Trumpa, chairman of the management board at Rokiskio Suris, one of Lithuania's largest dairy producers, said the decline in purchase prices signaled a return to "the normal market level" following a surge in prices in the wake of the 2014-2016 dairy industry crisis.  

"Purchase prices were very good in August of last year. They were sharply up compared with a year earlier, and the (current) decrease is a return to the normal market level," he told BNS.

Trumpa said this past summer's drought had kept milk prices from falling even further.

Tadas Povilauskas, chief economist at SEB Lithuania, attributed the decline in purchase prices to seasonal factors. 

"I've no doubt that raw milk purchase prices will turn up and will be higher in September, October and November," he told BNS. 

However, Trumpa said the ongoing modernization of large farms meant they no longer depend on seasonality, adding that milk prices in Lithuania were following global trends with a delay of several months.

Total raw milk purchase volumes for January through August declined by 2.5 percent year-on-year to 917,400 tons. In August alone, the volume was down by 8.6 percent from a year ago to 134,000 tons, according to the ministry's figures. 

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