Europe imposes duty on selected grain imports

The European Commission has raised the duty on imports of corn, sorghum and rye into the EU.

guffoto, Bigstockphoto.com
guffoto, Bigstockphoto.com

Effective from August 8, 2017, the European Commission (EC) has updated the import duty, setting a new rate for corn, sorghum and rye at EUR5.16 (US$6.06) per metric ton. This rate will remain in place until new import duties are fixed and enter into force. For wheat, the duty remains at zero.

The import duty is triggered automatically, and aims to help protect corn growers in the European Union (EU) from global market conditions. Set out in EU Regulation No. 642/2010, the rate is calculated based on the difference between the corn prices in the EU and the U.S.

On world markets, there are ample supplies of corn, and prices are low, according to the EC. The current year’s global corn harvest is forecast to reach a record-breaking 1.072 billion metric tons, reports the International Grains Council, and carryover at the end of the year is predicted to be 232 million metric tons, which would be the highest ever recorded. For the four major corn-exporting countries–Argentina, Brazil, Ukraine, and the U.S.–carryover is expected to be as high as 78 million metric tons, which would also be a record.

How EU sets import duties for grains

The General Agreement on Tariffs and Trade (GATT) sets bound duties for all grains in the EU. However, different rates may be applied for some cereals, according to the Blair House Agreement between the U.S. and the EU, and these duties are calculated on the basis of the difference between the effective EU intervention price, multiplied by 1.55 and a representative cost, insurance and freight (CIF) import price for the cereals at the Dutch port of Rotterdam.

Last time the import duty was triggered for corn, sorghum and rye was between July and November 2014, when it was valued at EUR5.32 per metric ton. It has been zero since November 2014.

Since 2011, it was agreed the representative CIF import price for sorghum and rye would be equal to that of corn.

Crop production as part of European agriculture

“The EU Crops sector is essential for European agriculture,” according to EU Agriculture Commissioner, Phil Hogan. “It has a production of more than 300 million metric tons of cereals, 30 million metric tons of oilseeds, and five million metric tons of protein crops.”

“The sector is vitally important for both the domestic feed and domestic food markets, and it makes a significant contribution to the competitiveness of our livestock sector and food industry in general,” Hogan told a meeting in Brussels in July.

According to the Commissioner, with exports averaging 40 million metric tons and a value of more than EUR10 billion, cereals represent the No. 1 contributor to EU exports of primary agricultural products.

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