Offers from any VAT-registered buyer in the EU interested in buying 20t or more of SMP from intervention stock closed this Monday at 11am Brussels time. The initial tender is for a maximum of 22,150t, which represents 6% of the 352,951t accumulated through intervention buy-in over the recent market crisis. SMP entered intervention for the last time in September, even though the scheme remains open.

The European Commission and experts mandated by EU member states will now examine the bids received to decide which offers to accept and reject. There is no obligation to sell any product if the prices offered are not high enough. “Reflecting the fragile nature of the recovery, the Commission will act with appropriate caution and the tender process will be under constant reassessment to prevent any unnecessary disruption,” European Commissioner for Agriculture Phil Hogan said when the tender opened last month.

There are some concerns linked to the large quantities of SMP in public and rivate stocks, equivalent to approximately one third of EU SMP production

Speaking at the European Dairy Association congress earlier this month, Commissioner Hogan addressed concerns that releasing SMP from intervention could weaken the dairy recovery, arguing that other products such as butter and cheese were currently driving price increases. However, the Commission itself warned in its latest agricultural outlook that “there are some concerns linked to the large quantities of SMPin public and private stocks, equivalent to approximately one third of EU SMP production (as regards public intervention, any disposal of products bought in has to take place in such a way as to avoid any disturbance of the market)”.

Fourth largest stock in Ireland

With 37,066t in warehouses, Ireland is home to the fourth largest amount of SMP stored under intervention after France, Belgium and Germany. Any significant sale could start eating into Irish-stored volumes, which would trigger the accounting process by which the European Commission refunds the national exchequer for the costs incurred in buying and storing the powder.

The European regulation published last month to invite the first bids also provides for a open-ended bi-monthly schedule of subsequent tenders to run until the initial 22,150t on offer find buyers at acceptable prices.

EU intervention picky about its milk powder

Full coverage: dairy intervention

First EU tender for intervention milk has closed

The European Commission will decide in the next few days if any buyers have lodged strong enough bids to start releasing stored skimmed milk powder (SMP) into the market.