Apr 20, 1985

NEAR CONSENSUS REPORTED IN DAIRY CARTEL.

GENEVA, APRIL 18 (IFDA/CHAKRAVARTHI RAGHAVAN) – Consultations among members of the International Dairy Council in GATT this week, have reportedly made progress and they are near consensus on downward revision of minimum prices for some dairy products and for restoring the operation of the arrangement.-

The three Protocol Committees under the arrangement, which oversee the agreements, were reported to be within consensus on the new minimum prices, but with still some differences on the issue of enabling the European Community to sell "old butter" from its stocks at below the minimum prices and the conditions to be attached to it.-

The delegates are to consult their capitals and hold another meeting on May 3.-

In November 1984, the minimum sale price arrangements were in effect suspended, following the community’s decision to sell "old butter", which it defines as at least 18 month old, at below the prices fixed under the arrangement.-

As a result of the suspension in November, other countries were enabled to sell their butter at below the fixed prices to maintain their own markets.

As a result, the U.S. has withdrawn from the arrangements. Austria, which sought derogation from the arrangement and failed to get it, has now given notice of its intention to withdraw.-

As a result of this week’s discussions, it was reported that a consensus is now likely for reducing the minimum prices of butter from the current 1.200 dollars per tonne to 1.000.-

Similarly, anhydrous milk fat prices are to be reduced from 1.440 to 1.200 dollars, and of whole milk powder from 950 to 800 dollars.-

The last is reported to be backed by most participants excepting New Zealand which reportedly has some problems with the new price suggested.-

The prices of some of the varieties of cheese are to remain at 1.000 per tonne, and that of skimmed milk powder at the current 600 dollars.-

The participants were also reported to e near consensus on the rescinding of the November decision and restoring the arrangements.-

However Argentina and Uruguay are reported to be still unhappy with the proposed reductions.-

However, there was still some disagreement on the EEC’s demand that it should be permitted to sell "old butter" at below the prices.-

The EEC wants the price reductions and restoration of the agreement to be conditional on permission to sell "old butter", which it estimates is now 360.000 tonnes in stock and rapidly accumulating and expected to reach 500.000 tonnes by end of 1985.-

The EEC seeks to define old butter as butter of 18 months age, while some others want it to be at least 24 months.-

The two major markets for EEC sales of "old butter" are reportedly the USSR and Iran.-

The Community wants the derogation to sell old butter for a longer duration than the 12 months preferred by others.-

There is also difference on how long after the 12 months, contracts entered into by then could be honoured and sales take place.-

Other exporters also are seeking other safeguards on the sales, so that their traditional supplies to these markets would not be affected.-