Brussels is set to reintroduce import duties on cereals in an attempt to prevent any further slippage in the price of grain to farmers.
Import duties were suspended at the beginning of January 2008 to boost grain supplies following the reduced global harvest of 2007.
At the time, the price of feed wheat coming off British farms stood at £180/t, signalling record returns for some arable farmers, but putting real pressure on livestock farmers’ feed bills, especially in the pig and poultry sectors.
Since then, prices have headed steadily downwards, in response to a massive global harvest and, more recently, to frenzied selling by investors in the commodities markets due to the financial crisis. Ex-farm prices now stand at little over £80/t.
Grain market managers in Brussels have therefore decided to reintroduce import duties on all cereals coming into the EU from third countries.
Up to 2.99m tonnes of wheat are allowed in under a special “tariff rate quota” arrangement, with the duty set at 12 euros/tonne. Higher tariffs apply on out of quota imports.
About 306,000t of barley are covered by a 16 euro/tonne tariff rate quota.
Grain already in transit by the time the regulation is published in the next few days will still be allowed into the EU without import duties applied.