Last week, the European Commission confirmed it had sold an additional 8,983t of skimmed milk powder (SMP) from its intervention stockpile for a minimum selling price of €1,230/t.

This brings the total volume of SMP sold out of the European Commission’s intervention stockpile to just over 141,000t since the start of 2018.

Peak

At its peak in November 2017, the European Commission held just under 378,600t of SMP in intervention, meaning roughly 240,000t of SMP remain in intervention stores across Europe.

While the European Commission’s tender sales of SMP were slow to get going (just 220t were sold between December 2016 and December 2017), more than one third (37%) of the intervention stockpile of SMP has now been offloaded to the market in just nine months.

The remaining stocks and monthly intervention sales continue to overhang the market and are pressuring prices

While the continued reduction of the intervention stockpile is welcome for global dairy markets, the remaining stocks and monthly intervention sales continue to overhang the market and are pressuring prices.

Spot prices for freshly produced SMP fell last week to €1,550/t and are likely to remain under pressure as more product is likely to be available to buyers over the coming months with the European Commission set to ramp up its tender sales of SMP to bi-monthly events from October.