EU decision to abolish grain duty leads to Irish wheat price cut
According to the Irish Grain and Feed Association (IGFA), the EU decision has been a major factor in cutting the price of Irish feed wheat, from 200 in January 2002 to 115.50 in June 2002.
The IGFA says Baltic and Black Sea states had a bumper harvest, and took full advantage of the lower EU import duty, because they have to earn hard currency by increasing their exports.
Most of their increased exports went to the Mediterranean countries, which had previously been supplied from within the EU.
This trend left stocks of EU grain unsold, and still rising in member states, particularly the UK and France, according to the IGFA.
Grain imports to the EU rose by 7 million tonnes, at a time when exports fell by 6 million tonnes.
On wheat alone, the EU went from net exports of 11 million tonnes in 2000/2001 to a mere 400,000 tonnes in 2001/2002.
The European Commission has sought permission from the Council of Ministers for a quota-based tariff system to limit grain imports.
However, the Council failed to agree, and the issue is unlikely to be raised again in time to help in the marketing of the already well under way EU harvest.
With Russia planning substantial investment in grain export terminals on the Baltic and Black Seas, continued grain flows into the EU are expected.
In Ireland, Seamus Funge, Director of the Irish Grain and Feed Association, called on Agriculture Minister Joe Walsh to support efforts by the European Commission to alter the current tariff regime.
Despite the arrival of Russian grain, grain stocks in commercial hands and held on farms and in intervention stores in the EU coming into July were only slightly greater than a year earlier.
And instead of last year’s extra influx of grain, there could be export demand this year for EU grain.
The expected EU harvest of 212 million tonnes is 16 million tonnes higher than last year, but world grain shortages could quickly soak up the shortfall.
