Sales of skimmed milk powder from intervention nears 200,000t mark
Total intervention Skimmed Milk Powder (SMP) sold to date by the European Commission is now around the 200k mark.
The latest tender for the product saw 30,067 t of SMP sold from intervention at €1251/t. Again this was an increase in tonnage and price from 2 weeks ago.
In the period January to July, EU SMP production grew by close to 3pc compared with the same period last year, supported by higher milk supply.
In mid-September, the SMP price was €1,580/t, over 13pc higher than in January. It had been increasing since April and levelled out at €1,630/t at the beginning of September, still 19pc below the last five-year trimmed average.
In the first seven months of the year, EU exports decreased by 1pc.
Nevertheless, exports to the Middle East (which includes some of the EU’s main export destinations) grew significantly, according to the EU Commission. Exports to Algeria (+16pc) and Egypt (+66pc) grew the most.
By contrast, exports to the main Asian markets (Indonesia, Philippines, Vietnam) continued to fall.
Those to some other markets (e.g. China) improved slightly, but still remained below last year’s levels.
Given the recent trends, EU exports are expected to grow by just 2pc for the whole year.
With the upcoming seasonal slowdown in milk collection, overall SMP production growth in 2018 is expected to be only slightly above last year’s level, partly as a result of the lower protein content of milk and higher processing demand for other protein-based products with strong export potential (infant formula, fat-filled powders).
So far, despite the production increase in a context of stable exports, around 141,000t of SMP have been sold from intervention stocks.
As a working hypothesis, moderate production growth, a 2pc increase in exports and 4pc more domestic use would allow the release of an additional 24,000t. In this scenario, private stocks could increase to 155 000 t, while intervention stocks would decline to 211,000t.
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