Market trends

Background

Over 60,000 tonnes SMP stocks sold

Over 60,000 tonnes of skimmed milk powder stocks were sold on 13 December in the biggest sale since public tenders began in December 2016.

This is according to the European Commission. The tender was made official on December 11 and included a total of 180,658 tonnes offered. Approximately 3/4 of skimmed milk powder bought into public stock have now been carefully returned to the market (60,537 tonnes).

Public stock reduced to 100,000 tonnes

The latest EU reports on the dairy market published by the Milk Market Observatory at the beginning of December highlight increased demand and satisfactory farm gate milk prices around € 0.36 /kg, reflecting a market situation that the careful handling of the stocks by the Commission has contributed to keep in balance. The public tender sale on 13 December reduces EU public stocks to around 100,000 tonnes (down from 380,000 in 2017) and clears stock from Poland, Belgium, Germany, Netherlands and Czech Republic.

Stabilising markets

Public intervention, managed by the European Commission, played an important role in stabilising markets between 2015 and 2017, helping to remove surpluses in an extraordinarily imbalanced scenario. The Commission opened at the end of 2016 a process of monthly and later bi-monthly public tenders to gradually put these stocks back into the market. This was done in a careful way.

This process is documented online in the Milk Market Observatory portal. The next deadline for submitting offers will be 8 January, 2019.

Source: EU