August 4, 2010

Europe urged to sell grain inventories to control prices

Feed manufacturers have urged the European Commission to release its five million tonnes in grain inventories to prevent a round of feed and food inflation.

Patrick Vanden Avenne, president of feed makers' association Fefac, said that placing Europe's supplies back on the market was essential to cooling soaring prices, which represented a further blow to livestock farmers only just recovering from the last spike in 20078-08.

"Higher feed prices could undermine the competitiveness of the EU livestock sector," Vanden Avenne said.

The spike affected the whole grains industry, he added, with all partners of the EU cereals chain raising serious concerns on artificial food price inflation.

Fefac spearheaded the campaign last year which led to the commission relaxing its restrictions on imports of genetically modified foods, amid concerns of soaring feed costs.

Fefac blamed speculation for the soaring prices, saying that even if worst expectations for Russian and Ukraine crops were confirmed, harvests elsewhere were sufficient to keep buffer stocks at sufficient levels.

"Speculation is the key reason for the current price hikes, Vanden Avenne said, adding that the commission should consider extra measures to curb excessive speculation on futures markets.