21 December 2001

Powder export rise

MILK powder export refunds have risen for the second time in a month in a bid to boost flagging markets.

Dairy market managers in Brussels increased export refunds by k100/t at the end of last week, mirroring Novembers move. This means Brussels will now pay k200 for every tonne of skimmed milk powder shipped out of the EU, and k700/t on whole milk powder.

Although in theory this latest move is worth about 0.6p/litre on the raw milk price, the industry fears it may not be enough to kickstart milk powder markets. These have suffered from plunging world prices and a series of export refund cuts earlier this year.

SMP has dropped 20% in six months to £1300, below the intervention value.

One major processor said the SMPexport refund needed to hit k325/t before it would affect the intervention milk price equivalent, which stands at about 16.5p/litre. Jim Begg, director general of the Dairy Industry Federation, said he expected "fairly significant sales" into intervention when it opened in March unless prices improved.

Jackie Cahill, chairman of the Irish Creameries Milk Suppliers Association, said the move on refunds did not go far enough. "But, given this latest increase and the low volume currently being processed, there is no reason why milk purchasers should not hold their milk price in the New Year." &#42