September likely to see prices moving up September could be a decisive month in the EU and UK butter markets as the commodity price could move either up or down. August proved very quiet and the industry is looking forward to more activity as food factories reopen and the holiday season comes to an end. Prices commonly move up in September across Europe and there are reasons to believe the same will happen again this year as a prelude to more active autumn demand. Butter output levels, below year-earlier levels through 2001 so far, are likely to continue to provide less butter than is being consumed right up to the New Year. Demand can normally only be met by drawing from stocks built up during the summer including those held under PSA, this year amounting to 200,000t, the same as in the two previous years. Stocks are being released from PSA and should prove adequate to meet demand. However some commentators believe demand for such stocks will be lower than normal, with a strong euro making it difficult to export from the EU. So current stocks could be more than required and EU prices could soften. But UK prices are unlikely to weaken as the rise in the euro's value has pushed up the UK butter intervention price. Last week there was only a gap of 2% between market and intervention prices. Any further weakening of sterling could even lead to a rise in UK market prices. {{M/E CANNED GOODS }}