November 24, 2011

EU may extend zero import duty on feed wheat

EU's cereals management committee may vote to extend a suspension of the bloc's import duties on feed wheat and barley until June 30, 2012.

In June, the EU suspended its import duties of EUR12 (US$16.05) per tonne for low- and medium-quality wheat and EUR16 (US$21.4) a tonne for feed barley until December 31, in response to a spring drought that hit supplies of animal fodder.

The possible vote could extend the measure until the end of the current marketing year, the agenda showed, to help meet strong demand for animal feed in southern European countries such as Spain, where stocks remain tight.

Cereals are available in quantity from the current EU campaign, but the problem is that they are expensive," a source close to the EU management committee told.

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$127.07) per tonne.

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

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 US of the bloc's 2,989,240-tonne quota for feed wheat in 2011, 572,000 tonnes are earmarked for imports from US and 38,853 tonnes for imports from Canada.

The bulk of the import quotas for 2011 have already been filled, but the full volume for 2012 will become available again from January 1, and could be imported at zero duty if the EU committee extends the current measures.

In October, the EU agreed to open a new import quota from 2012 for feed wheat from non-EU countries of 122,790 tonnes, taking the total TRQ for next year to 3,112,030 tonnes.