Farm Ireland

Wednesday 17 January 2018

All SMP bids rejected

Caitriona Murphy

Caitriona Murphy

The European Commission has rejected all bids for stocks of skim milk powder (SMP) in last week's round of intervention sales.

The latest round of tenders for SMP ranged from €30 to €221.50/100kg for the 79,553t on offer, but all bids were turned down because the prices were not considered to be satisfactory in light of the current market.

The move has been widely welcomed, with industry experts commending the Commission for avoiding an upset in the dairy market.

Demand for butter stocks remained high, with 11,935t of butter sold out of intervention at prices varying from €355.10 to €381.50/100kg.

This is well above the current EU market average of €345/100kg.

The butter was sold from cold stores in the Czech Republic, Estonia, Ireland, Lithuania and the United Kingdom.

Just 1,755t of butter remain unsold after this latest meeting of the management committee.

The expected clearout of butter stocks effectively means that the institutional cooling mechanism of buffer dairy stocks is now gone.

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Vincent Gilhawley, chairman of the Irish Dairy Industries Association, said the Commission's decision not to sell SMP was very welcome.

"The message buyers are getting is that the Commission will not sell SMP cheaply and they will have to pay the market price for it," Mr Gilhawley said.

"The Commission does not want to be seen as the one that dragged down the market," he added.

Irish Independent