Ornua PPI index rises for month of August

Ornua’s Purchase Price Index (PPI) has risen for the month of August, the Irish dairy exporter has confirmed.

In a brief statement to AgriLand this morning (Thursday, September 3), a spokesperson for Ornua said:

“The index for the month of August is 101.8…and is up from 101.7 in the previous month.”

This converts to 29.4c/L including VAT, based on Ornua’s product purchase mix and assumed member processing costs of 7c/L.

In price terms this is up slightly on the 29.3c/L equivalent figure for July.

The spokesperson added:

“The marginal increase is due to generally stable returns across the product range.

In addition, the Ornua Value Payment payable to members in the month is €3.4 million, which equated to 3.8% of gross purchases in the month [year to date 4%].

PPI Changes

Under the changes to the PPI index announced earlier in the summer, it was highlighted that, as the PPI is a measure of Ornua’s market performance on commodity products, it should only include base commodities.

As such, previously included market premium payable by Ornua will be removed and expressed alongside the PPI. Also, an increase in assumed processing costs, from 6.5c/L up to 7c/L was agreed.

In addition, going forward the annual members’ bonus will be paid monthly and combined with the market premium.

Together, they will be called the ‘Ornua Value Payment’ and reported as part of the monthly PPI communication.