EU skimmed milk powder hits new export recordThis article is powered by Dairy Markets
EU traders have sold more skimmed milk powder (SMP) onto world markets this year than ever before.
A record 466,800 tonnes of European SMP was purchased by non-EU buyers in the seven months to the end of July according to preliminary Eurostat data. Going back 10 years, only January to July 2015 comes close, when EU sales of 423,950 tonnes were recorded.
And the value of shipments hit a new record, of EUR996.5 million.
The greater demand was, in part, stimulated by a collapse in prices last year. And this helped maintain a level of prices comparable to those in 2015, despite the current low returns on the domestic market.
The SMP export price in July was EUR2,060 per tonne, an indicative figure based on customs volume and value returns.
The trade surge was led by major gains in sales to leading markets, including Algeria (+48%) and China (+65%) as our table below shows.
But there are gains, too in smaller markets, included in our table as ‘others’. We’ve included one such, Zambia, by way of illustration.
The greater volume of exports, though, does not seem to have provided a floor to skimmed on domestic markets. Last week, SMP still hovered below the EU intervention buying-in price of EUR1,698 per tonne.
Recent weeks have seen far greater sales into intervention. Just over 1,000 tonnes of SMP was sold into the EU scheme in the week ending September 10. But that adds up to only 11,160 tonnes since March.
The intervention buying-in ‘window’ closes in just two weeks’ time, at the end of September.
The lack of sales has been surprising, in view of the current low market prices. But the greater export potential, seen in our data, suggests dairy companies are gambling on strong world demand continuing.