February 18, 2008

EU grain prices won't fall to intervention levels in 2008

European Union grain prices are not likely to fall back down to intervention levels in 2008, as a large global harvest is not expected to replenish supplies, Hamburg-based grain trading house Toepfer International said in a monthly report Friday (February 15).

The 2008-09 global grain crop will be large enough to cover demand, assuming normal weather conditions over the next couple of months, said the report.

"A large worldwide grain surplus, however, that would lead to a replenishment of ending stocks can hardly be expected," according to Toepfer.

However, it added that an average or even below-average world grain crop in 2008-09 would result in continued high prices levels or an even further rise in price.

"Since (grain) stocks, in the EU as well as worldwide, are very low at the present time, it is unlikely that grain prices will decline significantly, certainly not to intervention levels," the report said.