ICMSA makes an about-turn on issue of SMP sales

The ongoing managed release of Skimmed Milk Powder (SMP) by the European Commission has been described as prudent and careful by the ICMSA.

The associations Dairy Chairperson, Gerarld Quain, made the comments, while he also admitted that the ICMSA  had been critical of the initial decision to release the product last November.

At the time, the ICMSA believed the decision to release the product had the  capability of ‘nipping in the bud’ the still fragile recovery in the dairy market, he said.

But Quain noted that the refusal of the European Commission to sell the product below market price had ensured that the recovering market had not been damaged.

“It’s important to acknowledge that the Commission acted prudently here and our reservations expressed before Christmas have proved to be unfounded so far.

“However, there is still an overhang of product in the system and it is vital that the Commission keep ‘selling hard’ to ensure that dairy market does not suffer a slump again or go into reverse.

“Latest analysis by Rabobank predicts that China will return stronger to the international market in 2017 and they’re forecasting that Chinese dairy imports could rise by 20%, which should be positive for dairy markets.

It is a crucial that Commissioner Hogan and his team continue the policy of not undermining markets by selling intervention stocks at low prices.

“Most farmers are only beginning to feel the benefits of the recovery and Irish dairy farmers desperately need stability for 2017 to pay off their own “overhang” of debt accrued in 2016,” he said.

No SMP sold at third tender event

Prices offered at the third skimmed milk powder (SMP) public intervention tender ranged from €155-190 per 100kg.

These were well below the minimum price set at the first tender on December 15 of €215.1 per 100kg.

As a consequence, the Commission recommended for a second time to refuse all the offers on the count that they were well below prevailing market prices. Price bids were received for a total of 7,490t of powder.

The quantities offered for sale by the EU Commission since November past represent roughly 6% of the total 354,000t which went into public storage in 2015 and 2016.