February 24, 2011

EU to halt grain import levies

The EU will temporarily cancel grain import duties and open the common market to other countries, which is expected to lessen growing pressure on cereal prices and thereby, meat.

The European Commission's common market committee made the decision to temporarily lift grain import duties last week. The measure will become effective within a few days and stay in force until June 30, the Estonian Agriculture Ministry said.

"The sharp rise in the price of grain has hit hard beef and poultry producers in particular with grain accounting for up to 80% of their expenses," the ministry's deputy secretary general for agricultural and trade policies Andres Oopkaup said through a spokesperson. "In addition to the price rise, grain cannot be bought anywhere today – Estonian producers are estimated to be short of up to 40,000 tonnes of grain till the end of November."

For various reasons grain prices have jumped since last July, with the price of soft wheat up by 65% on the global market and 90% on the EU market. Nowadays a tonne of wheat costs around EUR250 (US$344.41) and of barley around EUR210 (US$289.31).

A primary reason for the price rise is the unpropitious weather that hit different countries across the world last year. Another factor is Russia's decision to halt grain exports and fix prices because of last summer's drought.

"The grain crop decreased by around 3% worldwide, but various trade restrictions prevented sale of grain and increased the overall shortage," Oopkaup said.