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Friday 20 July 2018

Skimmed milk powder stockpile remains a serious concern - ICOS

Picture Clare Keogh
Picture Clare Keogh
Louise Hogan

Louise Hogan

The Skimmed Milk Powder (SMP) stockpile situation remains a serious concern with only a small quantity sold to date, warned ICOS.

The European Commission is pushing ahead with a proposal to set the quantitative ceiling for SMP buy-in at zero from March and instead operate on a tendering process.

There are over 370,000 tonnes of SMP in intervention as a result of a period of strong increases in production.

Alison Graham, ICOS European affairs executive, said low tender bids had been accepted for some volume and a decision had been made to increase the level of stock for sale by 101,061t this year.

Ms Graham said the moves had "signalled an increased level of market uncertainty for the year ahead".

However, she pointed out the fresh SMP market was quite balanced with production in the EU down by 4.7pc from January to October last year. Also, exports have increased by 39pc with increased demand in Algeria, China and Indonesia for powder.

"It is therefore imperative that the Commission and Member States maintain this balance, through the gradual release of stocks at market price, throughout the coming year," she said.

"A decision on whether or not intervention should open as normal in March should only be made when the market situation is clearer."

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The ICMSA's Gerald Quain said it is essential the Commission adopts a "cautious approach" to intervention stock sales. "They should declare that there will be no sales in the first half of 2018 until we have a clearer picture of the direction of the marketplace," he said. "It is difficult to predict the direction of dairy markets in 2018 at this stage and the Commission needs to be responsible in approach."

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