The import duties on maize, sorghum and rye were set at 5.32 EUR/tonne. Moreover, maize, sorghum and rye were no longer subject to export refunds. The decision was a response to the situation on the world markets and the resulting low prices.
Speaking to Milling & Grains about the rise, Jack Watts, senior analyst for cereals and oilseeds at AHDB Market Intelligence, said: "We will have to wait and see how the global market reacts, but I don’t think it can have any fundamental influence on the consumers.”
The International Grains Council forecasted world maize production to reach 963 million tonnes in 2014, which would be the second highest result after last year’s record level. The bumper harvest of maize was expected particularly in the US, which was why world maize prices fell sharply as at 1 July 2014 (203 $/tonne). The duty had been reinstalled by the European Commission to protect the domestic production.
“It’s in case the forecasts are right. Excess in production for example in the US would be negative and would mean that guaranteed price floor could be bypassed,” Watts explained.
“It could hurt exporters from outside of the EU such as Ukraine, but I don’t think it’s a political move. We have to remember that four years ago it was just out of calculation that the duty was set at zero. It’s because the world maize price was so high,” he added.
The latest calculations were based on the agreement between the EU and the United States which involved setting tariffs on the basis of individual world reference prices for specific cereal types. EU has bound duties under the General Agreement on Tariffs and Trade (GATT).
“People may view it as an old fashion marketing mechanism that other markets have moved away from, but I don’t think it’s either good or bad,” said Watts.
The individual tariff quotas are not affected by the measure. A duty-free quota of 277 988 tonnes of maize open to all non-EU countries, opens each year on 1 January. By 4 July the quota for 2014 had been taken up in full.