By Robert Harris
BRUSSELS has granted the biggest export subsidy of the season, apparently to try to kick start sluggish trade.
So far, just 430,000 tonnes of barley have been earmarked for shipment from the EU since July, compared with 1.5 million tonnes of wheat.
The refund, for 39,500 tonnes of free market French barley, is worth a maximum of Ecu63.95, about £42/tonne, and equates to a world price of just £35/tonne.
“It is not an enormous shipment, but the management committee seems to be sending a message to the trade – make us an offer, you may succeed,” says David Walker. “But I cant see it continuing to grant rebates at this sort of level – it is costing half as much again to export barley as wheat.”
Brussels set aside Ecu400 million for export refunds last November. Since then, the world price of wheat has plummeted from about £80 to £55/tonne, and barley from about £75 to £38/tonne.
Even at typical rebates of Ecu30-45/tonne respectively, the Brussels budget would have covered only a third of the 30 million tonnes of cereals which must be exported to avoid a sharp rise in intervention stocks. “We can expect that transfers will be made from other sectors to cover the cereals budget,” says Mr Walker.