May 16, 2008

  

EU to lessen corn imports as price advantage fades

 

 

EU's corn imports are likely to lesson as it gets pricier relative to domestic supplies, agricultural consultancy Strategie Grains said in its monthly report Thursday (May 15, 2008).

 

As a result, Strategie Grains has cut its non-EU corn import forecast for 2008-09 by 1.0 million tonnes to 4.3 million tonnes. Forecast for 2007-08 were also cut by 1 million tonnes, to 11.7 million tonnes. 

 

A downward revision of 1.0 million tonnes was also made to the 2007-08 non-EU corn import forecast, but it was still left at a hefty 11.7 million tonnes.

 

EU corn imports soared in 2007-08 due to adverse weather conditions which lowered grain production. Feed producers who normally use wheat as feed switched to the more competitively priced import corn as wheat prices rose. Most of the imported corn came from South America.

 

EU corn import licenses from third countries totaled 12.3 million tonnes so far in 2007-8, triple the volumes a year ago and five times more than that three years ago.

 

Sorghum imports also soared ten-fold from 525,000 tonnes in 2006-07 to 5 million tonnes in 2007-08.

 

Corn imported from outside the EU into northern EU countries is no longer competitively priced against domestic corn, said Strategie Grains. However imports into southern nations remain at an advantage.

 

Corn also remains competitive against wheat and barley in the south, but not in the north, the report said.

 

Moreover, the tight situation on the world (corn) balance for 2008-09 should mean that prices on the world market remain high, said Strategie Grains.

 

Strategie Grains also forecast a 13-percent rise in EU grain production in 2008-09 to 289.1 million tonnes due to increased yields and harvested area.