Non-assured grain warning
Non-assured grain warning
WHEAT and barley will soon be priced off farm-assured futures, leaving non-assured grain with fewer homes, and possibly more discounted prices.
The London International Financial Futures and Options Exchange (LIFFE) will only take assured grain from Sept 2003.
Any farmer not assured by then will have fewer choices available, says Home-Grown Cereals Authority economist, Julian Bell.
"Non-assured grain can currently be taken into futures stores, but that will no longer be possible. The grain will probably have to go for export, which could incur higher haulage costs, discounting the price."
But assured values could increase slightly, he adds. "The futures set a base for the market, and making LIFFE assured could raise this floor slightly."
All grain is currently priced off the futures market, meaning both assured and non-assured grain has the same starting point.
David Balderson of Viking Cereals says: "Farmers are getting screwed. They were forced to become farm-assured on the pretence they would get a premium for their grain." But this is not the case – non-assured farmers are simply getting a discount, he adds.
Mr Balderson reckons the new contract will not have much impact, as almost everyone will be assured by 2003.
"But there are still gaping double standards working against the farmer," he adds. "Imported grain, which is not assured, can be taken in by assured-only consumers, as long as it can be traced to the port of origin. But futures grain is not allowed, even if it comes out of a TASCC store." *