Brussels set to release more butter
The European Commission is expected to release further stock of butter from intervention this week, as demand remains strong.
However, the volume of skim milk powder (SMP) sold will depend on the tender prices offered.
Tenders for some 13,669t of butter and 79,531t of SMP close today. It is believed that strong demand for butter is likely to push up the €3,450/t minimum price set at the last tender.
Industry experts believe all remaining butter stocks in intervention could be cleared within the next two tenders.
However, the release of 79,531t of SMP is unlikely to be as straightforward. Unless SMP tender prices improve from the €1,610-€2,100/t range offered in the last round, stocks will not be released.
Industry sources pointed out that SMP on the world market is currently trading at around €2,350/t and tender offers will have to be close to this level to be accepted.
The Commission has already indicated that it is unlikely that all intervention stocks of SMP will be released onto the market this season.