13 August 1999
Million-tonne export boost for EU cereals
By Robert Harris
CEREAL exports from the EU received another big boost yesterday (Thursday) as Brussels market managers continued last weeks aggressive stance by awarding almost a million tonnes of licenses to shippers.
Just over a quarter of that – 257,000t – was for free-market soft wheat.
That was close to last weeks total despite, Brussels having to grant a slightly higher subsidy of 33.25/t (£22/t) after US soft red winter wheat (the global benchmark) slipped to $93/t (£58/t).
Although this places nearby sales at a slight premium, so-called negative correctives – reductions in the subsidy month by month – mean September-December prices are more in line, and fit Third Country purchase plans, notably Irans.
“Irans requirements have nearly doubled to 5.5m tonnes this season,” says the Home-Grown Cereals Authoritys Gerald Mason.
“These licenses suggest the commission is taking advantage of this, before Australian new-crop becomes available at the end of the year.”
It has also been keen to book business ahead of a possible US sales drive, he adds. Due to political problems, no American grain has entered Iran for four years.
“However, Iran bought 50,000t of US maize this week, which suggests it could buy wheat soon.”
A further 100,000t of wheat was released for export from intervention stores, priced at 85-94/t (£56-62/t).
And export licenses for 235,000t of free market barley and more from intervention stores were also granted.