All bids for SMP intervention stocks rejected again
Results of the third tender of the intervention sales of butter and skimmed milk powder (SMP) came out today, and once again the Commission was unable to shift any SMP.
In a statement the Commission said: “All bids for SMP (ranging from 185 to 215 €/100 kg) were rejected (unanimous vote) because the prices were both lower than the EU average weighted price for SMP for food (232 €/100 kg) and for feed purposes (216.5 €/100 kg).”
However, the management committee agreed on the sale of a further 210 tonnes of butter at a price of 361 €/100 kg, from cold stores in Eastern Europe. This leaves 1,545 tonnes of butter and 79,553 tonnes of SMP available for the next tender on 20 July.
There is currently a shortage in the supply of butter giving the Commission the opportunity to sell off stocks at a good price without risking market disruption.
Finely balanced SMP market
As for SMP, the feeling is that the market is quite finely balanced and that the Commission may be afraid that selling stocks could cause prices to drop, especially as the Southern Hemisphere moves into its autumn flush.
Just before the latest tender, Copa-Cogeca, the EU farming lobby, sent out this warning: “We reminded the EU Commission today that they must continue to exercise caution in managing EU dairy stocks, in order to minimise market disruption and contribute to a more stable market situation.”
It went on to say: “EU buyers need to pay market prices for EU intervention products which contribute to a sustained increase in milk prices for farmers. The current market situation fully justifies further milk prices increases in the coming months, to enable farmers to pay a few of their many outstanding bills.”
