RESTRICTED
WORLD TRADE IDA/CMP/2
21June1995
ORGANIZATION(95-1650)
International Dairy Agreement
COMMITTEE ONCERTAIN MILK PRODUCTS
Report totheInternational Dairy Council
1. TheCommittee adopted thepresent noteonitssecond session inaccordance withArticle VII:2
oftheAgreement andRule22oftheRules ofProcedure.
2. Theagenda proposed inairgram WTO/AIR/94, aswellasthereport ofitsfirstsession
(IDA/CMP/1), were adopted.
3. TheCommittee agreed toconsider theproposed formats forQuestionnaires 1-5,regarding
information tobefurnished under Article IIIoftheAgreement andRule23oftheRules ofProcedure
(IDA/W/5), atitsnextmeeting.
4. TheCommittee hadbefore itacommunication from thePermanent Mission ofJapan
(IDA/CMP/W/3/Rev.11).TheCommittee approved anamendment tothe"Annex onCertain Milk
Products -Attachment C:Japan" inaccordance withtheprovisions ofArticle 3,paragraph 5,ofthe
saidAnnex. AProcès-Verbal signed bytheDirector-General oftheWorld Trade Organization will
bepreparedandcertifiedtruecopieswillbedistributedtotheMembersoftheWorldTradeOrganization.
5. TheCommittee reviewed thereplies tothequestionnaires andtooknoteofthesummary tables
prepared bytheSecretariat. Italsoreviewed themarket situation forproducts covered bytheAnnex
onCertain MilkProducts. Inthesecond quarter of1995, theworld market situation forvarious dairy
products, andinparticular butter andmilkpowders, wascharacterized byhighprices (near record
levels) andtightsupplies. IntheNorthern Hemisphere, milkproduction hasremained relatively steady
andtherehasbeenadrawdown ofbutter andskimmed milkpowder stocks. IntheECmarket, increased
useofbutter forpastry andice-cream manufacture hascontributed tothissituation. Although milk
production inOceania hasbeenathighlevels, virtually allbutter andskimmed milkpowder supplies
were committed early intheyear, leaving littleadditional supplies forexport. Furthermore, the
production ofskimmed milkpowder wasalsodown inEastern European countries. Atthesame time,
Asian demand hasbeenstrong. Incontrast, theworld market situation forcheese hasremained stable.
6. Anumber offactors could affect thecontinuation ofhighworld market prices forbutter and
skimmed milkpowder inthesecond halfof1995. Inparticular, partoftheincrease inprices isdue
tothelowvalue oftheUSdollar. Furthermore, thehighprices could attract increased exports,
particularly ofbutter fromtheUnited States. However, reductions inexport subsidies bytheECand
theUnited States should continue tocontribute tohigher world market prices.
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7. Forthesecond quarter of1995, thefollowing ranges ofprices werereported (pertonf.o.b.):
-between US$1,950 andUS$2,300 forskimmed milkpowder forhuman consumption;
-between US$1,900 andUS$2,450 forwhole milkpowder;
-between US$2,000 andUS$2,500 forbutter;
-between US$2,300 andUS$2,700 foranhydrous milkfat;
-between US$1,950 andUS$2,375 forCheddar cheese.
8. Thenextregular session oftheCommittee willbeheldon18-19 September 1995, subject to
confirmation bytheSecretariat.