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Friday 20 October 2017

Hogan stresses that he won’t sell intervention stocks until price is right

Irish Commissioner Phil Hogan. Photo: Collins
Irish Commissioner Phil Hogan. Photo: Collins
Ciaran Moran

Ciaran Moran

European Agriculture Commissioner, Phil Hogan says he won’t sell any of the EU’s giant stocks of skimmed milk powder in intervention until the ‘price is right’

It comes as all offers for the sixth tender of the stock are understood to have been rejected by the commission last week.

Indeed, according to trade sources prices offered were lower than those offered for pervious tenders.

Speaking to French dairy farmers late last week, Hogan said the  350,000 tonnes of SMP in public stores is equivalent to some 30% of annual EU production.

He said releasing them on the market might disturb the improvement taking place. However, he also said keeping them in the stores also weighs on the market and prevents a healthy recovery.

“This shows that, in rugby terminology, public intervention is like an up-and-under kick: it momentarily removes the pressure, but does not make it disappear.

“I assure you that the Commission will act cautiously and prudently in returning these stocks to the market, always keeping our farmers' interest at heart.

“For the moment, we have refused all offers, which is a clear indication of our commitment not to disturb the market.

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“And let me say very clearly that the Commission will not under any circumstances sell this product until such a time as the price is right.

“However, no matter how simple it sounds, the solution to public stocks is not to build them,” he said.

Hogan said that buying surplus production with public money should be regarded as a failure in the system, to be used as a last recourse.

“I refer again to the importance of market orientation.

“And I want to remind you that there are huge opportunities on global markets.

“European dairy farmers produce the highest quality products in the world, and the expanding global middle class is looking for these products to feed their families.

“World consumption of milk and dairy products is expected to grow by 1.8% globally in the next decade.

“This is why I have been travelling the world to find new markets for our dairy products,” he highlighted.

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