Brussels, Belgium
September 26, 2007
Link to this release in other European languages
Mariann Fischer Boel, Commissioner
for Agriculture and Rural Development, today announced that she
will propose in the coming days the total suspension of cereal
import duties for the current marketing year - which ends on
June 30, 2008 – unless market conditions justify their
reintroduction before that date. The proposal, which was put to
EU agriculture ministers, is a reaction to the exceptionally
tight situation on the cereals markets and the record price
levels. Although the actual levels of border protection for
cereals are rather low, import duties are still applied for
certain types of grains that are relevant for the balance of the
EU market. At the same time, there are no export refunds on
cereal exports. The proposal would have to be approved by the
Council of Ministers.
The cereals market is currently characterised by historically
high prices. The 2007 cereals crop is now estimated below last
year's level because of dry and unusually hot weather in April
followed by adverse summer weather in western Member States and
drought and heat-waves in the Southeast of Europe. This outlook
is likely to lead to a further reduction in the EU of private
cereal stocks by the end of the 2007/2008 marketing year. At
global level, closing stocks in 2007/2008 are expected to fall
to a historically low level, especially in the major exporting
countries.
Background on import duties
The EU has bound tariffs for all cereals set under the GATT
agreement. However, applied rates are different. The system
originates in the Blair House Agreement between the US and the
EU and involves setting tariffs on the basis of separate world
reference prices for clearly defined cereals types. The duty is
fixed on the basis of the difference between the effective EU
intervention price for cereals including monthly increments,
multiplied by 1.55 and a representative cif import price for
cereals at Rotterdam.
The resulting duty is currently set at 0 for durum wheat, high
quality soft wheat, rye and sorghum. The duty for maize is set
at €1.93/t since 16 September 2007. It has been fluctuating for
several months due to the volatility of the US market reference
prices for maize.
Tariff rate quotas were introduced in 2003 on barley and low and
medium quality wheat in response to large imports from Community
of Independent States countries.
For medium and low quality soft wheat, annual Tariff Rate Quota
of 2,989,240 tonnes is open, including a country-specific quota
of 572,000 tonnes earmarked for imports originating in the
United States and 38,853 tonnes for Canada.
The remaining 2,378,387 million tonnes is split into four equal
tranches of 594,597 tonnes, one of which is open each quarter to
other third countries. The duty payable on imports under the
quota is set at €12/tonne..
For barley, annual Tariff Rate Quota of 306,215 tonnes is open
with €16/tonne duty payable. There is another quota of 50,000
tonnes of malting barley at a duty of €8/tonne.
A duty-free quota of 242,074 tonnes of maize was introduced in
2006 which is split into two equal tranches open to all third
countries. This quota has been entirely used for 2007.
For maize and sorghum imported into Spain and Portugal, there
are reduced tariff import quotas since Spain and Portugal’s
accession to the EU. An agreement between the EU and the US
allows a fixed quantity of third country maize/sorghum to be
imported, if necessary at a reduced duty (abatement), to
compensate the US for the loss of its Iberian Peninsula markets.
The current agreement applies to 2 million tonnes of maize and
0.3 million tonnes of sorghum to be imported annually into
Spain. Amounts are reduced by any quantity of grain substitutes
(e.g. starch residues, corn gluten feed and citrus pulp)
imported into Spain in the same year. A tariff import quota of
0.5 million tonnes of maize into Portugal (tariff fixed to
ensure that the quota is filled up to a maximum level of € 50
per tonne) was also agreed. In view of the low levels of the
calculated duty and the good pace of maize imports, no abatement
has been granted during 2007. |
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