Brussels manages to sell only 40t of its SMP stocks in first tender
The first sales of skimmed milk powder (SMP) from intervention resulted in just 40t of product being sold.
A total of 22,000t was on offer. A breakdown of the sales shows that 20t was sold in Germany with the remaining 20t acquired by UK buyers.
The European Commission only selected bids that met a minimum selling price of €2,151/t, a level above average market prices, which for November were €2,000/t.
Over 350,000t of SMP remains in public storage and the European Commission has opened the second tender, re-offering the product that was unsold from the first tender.
According to the regulations, tenders will take place on the first and third Tuesday in the month. The deadline for the second tender is January 3, 2017.
ICMSA president John Comer said he was not surprised at the weak uptake for the intervention sell-off.
“Brussels must be extremely careful in the way the sell-off of the remaining powder stocks is handled. The recovery in dairy that we have seen over recent weeks is still very fragile.
“Farmers are only now starting to cover their costs. They have significant debts, that have been amassed over recent months.”
Comer added that ICMSA had advocated a delay in selling off any dairy intervention stocks until such times as Irish farmgate prices had reached 30c/L.
He acknowledged that the SMP currently in store had a fixed sell by date for human consumption purposes.
“We have made it clear that Brussels must sell its SMP stocks on the basis that product intervened first must be sold off first. But Brussels’ primary objective is to ensure nothing is done to damage the recovery in dairy markets.
“If this means keeping some product in store beyond its human consumption sell by date, so be it. The powder can then be sold off as animal feed.”