July 11, 2011

 

EU levy reference changes for US sorghum

 

 

The US Grains Council (USGC) and the United Sorghum Checkoff Programme have succeeded in a year-long effort to resolve a provision in EU tariff regulations that had hindered US sorghum sales to Europe.

 

The efforts led to an EU proposal which was voted on in June and became effective July 1. The Chicago Board of Trade (CBOT) price of corn will now be the reference point for determining the sorghum levy.

 

"The EU needed a different reference," said Cary Sifferath, USGC regional director for the Mediterranean and Africa. "We began investigating this in July 2010, and then put together a white paper to show how sorghum correlates better with No.2 corn than with barley."

 

The council petitioned the EU for a rule change to use either US sorghum prices or, as a second choice, US corn prices as its reference.

 

A further council effort rallied European groups, including feed millers, the Grain Traders Association and the Irish Grain & Feed Association, to support the petition. The council also worked with USDA's Foreign Agricultural Service staff in Brussels to present an official request.

 

"This means that when Europe is short of grain, the sorghum levy will be calculated on a realistic basis that reflects real-world prices," said Sifferath. "Whatever the market dictates, the sorghum levy will reflect it, and European buyers should be able to import sorghum readily, without weeks of dispute over the levy."

 

The breakthrough reflected "a significant effort to educate the EU's governing body," said Florentino Lopez, executive director of the United Sorghum Checkoff Programme, who specifically cited Council staff members, including Sifferath and Alvaro Cordero, as "very instrumental" in this success.

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