Europe sells off dairy stockpiles

Europe is selling the stockpiles of dairy products which have been accumulated over the last two years.

The EU bought more than 300,000 tonnes of butter and milk powder to bolster farm incomes when dairy prices crashed in 2008. But with the world prices strong and supply tightening, it has decided to start selling the supplies.

Rabobank analyst Tim Hunt said it is the biggest sale of its kind since 2005. "It amounts to about three weeks of global trade of each product line," he said.

"Now how much of that is actually bought under the tender process, and at what price, will to some extent determine how much impact we see in pricing globally, but the amount is fairly significant," he added.