February 18, 2011


EU suspends feed wheat, barley import duties



The EU has temporarily suspended its import duties on feed wheat and barley, raising the prospects of purchases from Australia amid tight feed supplies and high global prices, the bloc's executive said Thursday (Feb 17).


EU government experts approved plans announced by the European Commission last week to set the bloc's EUR12 (US$16.32) per tonne duty on feed wheat and EUR16 (US$21.77) per tonne duty on feed barley at zero until June 30, 2011, a European Commission official said.


"I hope this proposal will reduce tensions on the European cereals market," EU Agriculture Commissioner Dacian Ciolos said.


"While prices remain high on world and EU markets we have an obligation to do what we can to help ease the situation until the end of the marketing year," Ciolos said.


World ending stocks for cereals will be 62 million tonnes lower at the end of the 2010/11 marketing year in June than last year, suggesting that cereals prices will remain high until then, the Commission said.


The zero tariff will take effect from February 25 and apply to more than half the EU's annual tariff-rate quota (TRQ) of 2,989,240 tonnes for low- and medium-quality soft wheat, and to the full 306,214 tonne annual TRQ for feed barley, the Commission said.


Under international rules the EU fixes maximum duties on cereals imports, known as bound tariffs. For low- and medium-quality wheat, these are currently fixed at EUR95 (US$129.24) per tonne.


For some cereals, the bloc has established TRQs-volume quotas for grain imports at duties much lower than the standard bound tariffs.


It was these TRQ duties for feed wheat and barley-usually set at EUR12 (US$16.32) per tonne and EUR16 (US$21.77) a tonne respectively-that the EU decided to suspend.


Under EU rules, high quality wheat is defined as having a minimum protein content of 14%, compared with 11.5% for medium quality wheat.


Strong exports from major EU grain producers France and Britain in the early part of the 2010/11 campaign have led to tight supplies within Europe, raising the prospect of the first imports from Australia in more than a decade.


EU feed makers have regularly lobbied the Commission to suspend the duties in recent months, as surging feed prices stoked fears of a sharp fall in the bloc's livestock herd.


Traders will be allowed to release cereals on the EU market at the zero tariffs for all shipments en route to Europe by June 30, so as not to penalise traders who have cargoes in transit, the Commission said.


In 2003, the EU introduced TRQs at reduced tariffs for imports of low-and medium-quality wheat, and barley, with exclusive rights for Canada and the US.


Of the bloc's 2,989,240 tonne quota for feed wheat, 572,000 tonnes are earmarked for imports from the US, and 38,853 tonnes for imports from Canada.


Less than 2% of the 2011 import quota for feed wheat had been taken up by February 7.

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