European Dairy Market SummarySunday, Mar 2, 2003
Milk production trends in most European countries are seasonally increasing. As the beginning of the spring flush builds, producers in various countries monitor their output as the milk production quota yearend nears. In many countries, milk volumes are reported to be in line with quota volumes, but some adjustments may be needed during the final few weeks of March in some countries. During February, production of skim milk powder for intervention offering March 1 could be generated. Traders and handlers indicate that some powder is being readied for offering, but the extent of these offerings is unknown.
Within the past few weeks, the EU Management Committee met and increased the skim milk powder export refund from 440 per ton to 510, a 16% increase. Traders and handlers attribute this adjustment to various factors: a firm euro against the dollar, slow international sales, and available stocks that are not moving before the start of a new production season. European traders acknowledged the final DEIP allocations in the U.S. but then state that they will be very interested who the buyers will be and what the bonuses will be at this slow sales time. European traders did indicate that an Algerian tender for 12,500 mt of both skim and whole milk powder, along with 3000 mt of butter oil for March/April delivery is currently being considered.
Outside of this buyer, traders report small lot volumes, but nothing significant. Political unrest in the world along with the ramifications of potential war is causing potential buyers to be cautious.