Following the green light given by the competent EU management committee, the European Commission will, as announced (see EUROPE 11674), open a tender procedure to return a small quantity of the stocks of public intervention skimmed milk powder to the market.
European operators will have until 13 December to submit their first bids to national authorities. On 15 December, the Commission will decide with the member states, in light of the bids and the market situation, whether or not to sell the products. It is at that moment, in the management committee, that a minimum sale price will be decided. All bids equal to or above that price will be accepted.
To test the market reaction, the quantity of product in the tender procedure will be limited, corresponding to only 6% of the total 355,000 tonnes of skimmed milk powder stored after being taken out of the market since September 2014. The tender procedure (which involves 22,150 tonnes) relates to powdered milk bought in July, August and September 2015.
Why open this procedure now? The Commission has highlighted that: - this is the low season (November is the month when powdered milk production is at its lowest); - the programme to reduce milk production has begun; - milk prices have been rising since May and farm gate prices have risen slightly since August. Between July and October 2016, farm gate prices in Europe rose by 10%.
The Commission does not know how long it will take to return all the powdered milk in public storage to the market. The market situation is improving but the stocks held are equivalent to one third of the annual production of skimmed milk powder, an expert pointed out. The very existence of these stocks affects the market and opening a tender procedure will only drive this point home, a source said. (Original version in French by Lionel Changeur)