May 30, 2012

EU to decide on extending zero feed grain imports' duties

In response to high grain prices and concerns over output in the EU and Black Sea region this year, the EU will decide next month whether to extend the suspension of the bloc's import duties on feed wheat and barley beyond June.

Last June, the 27-nation bloc suspended its preferential import duties of EUR12 (US$15) a tonne on low- and medium-quality wheat and EUR16 (US$20) a tonne for feed barley. The suspension was extended in November until June 30, 2012.

"The European Commission has agreed to discuss the issue at the June 7 cereals management committee," a spokesman for the EU's executive said in a statement, referring to the regular meeting of EU government officials that decides on EU grain policy.

A vote on whether to reintroduce the import duties or to maintain them at zero is not expected at that meeting. The committee is instead expected to take a final decision later in June.

The debate over a possible extension followed a formal request to the Commission from Spain and Portugal, French farm office FranceAgriMer said in a note late last week. Both countries are highly dependent on imports to meet demand for animal feed.

The EU usually applies its preferential duties to a fixed annual volume of feed grain imports, known as tariff rate quotas (TRQs).

Of the EU's 3.11 million tonne TRQ for low- and medium-quality wheat for 2012, about 600,000 tonnes is reserved for imports from the US and Canada. Most of the remainder usually comes from Russia and Ukraine.

The quota for barley this year is set at 307,105 tonnes. For all imports above the annual TRQs, the EU has set maximum import duties under international agreements known as bound tariffs. These are set at EUR95 (US$118) per tonne for low- and medium-quality wheat and EUR93 (US$116) per tonne for barley.