EU talks on keeping grain prices down

By Olivia Cooper

EUROPEAN grain prices are too high, according to the European Commission, which is now discussing plans to keep values in check.

Brussels is concerned about the threat of rising global inflation following the terrorist attacks in the USA, and is considering three steps to lower internal prices.

The first is to continue to refuse export refunds on all free-market wheat, barley and oats.

This means that cereals for export outside the EU will have to be sold at world market prices – Euro11/t (6.88/t) below current internal prices.

Option two is to tender a large amount of intervention rye for sale onto the domestic market.

With almost 4 million tonnes of German stocks available, this would depress feed-quality cereal prices.

The third alternative would remove the Euro10/t import duty on Black Sea and Baltic cereals.

This would effectively make central and east European grain 6.25/t cheaper to bring into the EU.

“Imports would flood into western Europe, so cheaper wheat would then be available to the British consumer,” says James Maw, wheat trader for Glencore Grain.

Following the news, London wheat futures fell by 2/t for January, making a total fall this month of 5/t.

John Bensted-Smith, EC directorate general for agriculture confirmed plans would be discussed in greater detail at this weeks meeting.

Traders expect the measures will be pushed through within the next couple of weeks.


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