Little effect seen from EU grain tariff suspension

(Resource News International) — The move by the European Union to
suspend import tariffs on most cereals for the rest of the
2007-08 marketing year will not open the door for increased
Canadian wheat and barley shipments, a spokeswoman for the
Canadian Wheat Board said.

“What we are selling to Europe in terms of wheat is high-quality, high-protein wheats, and that goes into the EU region tariff-free anyway,” said Maureen Fitzhenry, the CWB’s director of media
relations.

The change being made on import tariffs is
for the lower-quality, lower-protein wheats, of which Canada does
not have a lot available this year.

“In any case, even when Canada does have a quantity of these
supplies available for export, the EU is not a target
destination,” Fitzhenry said. “As a result, from a wheat
perspective, the EU move will be net neutral.”

As for barley, the move is also seen as insignificant,
Fitzhenry said, noting the CWB does not really sell barley into
the EU.

“The EU change is not something that will create
opportunities that did not exist before for the CWB,” she said.

The tariffs that the EU is removing were
relatively low to begin with, Fitzhenry said, especially when compared with
prices that exist in today’s market.

The EU’s 2007 cereals harvest is projected to fall below
last year’s level by around 3.5 per cent due to dry and unusually hot
April weather followed by a poor summer in Western Europe and hot
drought conditions in the southeast.

The EU’s cereals output was seen declining at a time when its
stocks are already low, the EU said in a prepared statement. As a
result, the EU will need more imports in 2007-08 than in 2006-07.

The EU tariff reduction, however, will not apply to oats as
the need to balance the EU market continues.

European oats production is mostly concentrated in Finland,
Poland and Sweden and traditionally supplies the British and
German markets. Any EU exportable supply is normally shipped to
the U.S.