Wholesale milk collection prices at livestock farms have decreased by 12-15%, but this decrease in raw material has not been reflected in the final products in supermarkets.

In the area of Fier and Berat, a kilogram of milk is being bought from large farms for Lek 80, value-added tax (VAT) included, from Lek 90 which was in the first six months of 2022. While the purchase prices for farmers and small farmers have decreased even more to up to Lek 13 per liter. Now the collections are from Lek 65-70 per liter from Lek 80 last year.

But as raw material prices have decreased by 12-15%, this has not been reflected in retail sales. INSTAT reported that a liter of milk in July 2023 was 14% higher than in July last year.

Operational costs have also been reduced due to the reduction in fuel and electricity prices, which are an important part of the final cost for processors.

Albanian markets suffer from a lack of elasticity in cases where raw materials and import prices decrease. Last year, after the war in Ukraine, prices immediately increased in all products, especially food, because the countries involved in the conflict were the largest suppliers of food and energy to the world market.

However, within the year the situation stabilized and prices for a series of products decreased, which are not being reflected in the local market at the same rate. The IMF, in an analysis of inflation in the Balkans, noted that prices follow the growth curve very quickly, but this is not the case when prices decrease.

High dairy prices were also pushed by the crisis the livestock sector is experiencing. The number of dairy cattle is decreasing year after year at double-digit rates, and as a result, shortages of raw material, milk, have been created in the market. The livestock crisis has made Albania one of the countries with the highest dairy prices in Europe.

The prices of dairy and eggs in Albania were 111.7 percent of the average of the European Union countries. Albania was ranked among 14 European countries with the highest dairy price last year. In 2020, the price of dairy and eggs in Albania was 105% of the EU average, but in the following two years, it increased by 6.8 percentage points.