The European Union has set a new import duty on maize, sorghum and rye at €5.16 per tonne. This will ensure that European producers are not put at a disadvantage in the current market conditions.
Published on 8 August 2017 in the Official Journal, the decision is based on Regulation (EU) No 642/2010 regarding cereal sector import duties, which provides that the import duty on maize, sorghum and rye should be calculated according to the difference between a reference EU price and the US maize price.
It comes in response to the situation on the maize world market where a record global maize harvest is expected in 2016/17 resulting in ample supply and low prices.
The latest forecast from the International Grains Council estimates the 2016/17 global maize production at 1,072 million tonnes, i.e. the highest record level, and carry-over of world maize stocks at the end of the 2016/17 marketing year at 232 million tonnes also the highest ever level. Cumulative carry overs in the four major exporters (Argentina, Brazil, Ukraine and the US) are forecast at 78 million tonnes, also a new record.
Import duties should be fixed for the period from 8 August 2017 and should apply until new import duties are fixed and enter into force. The individual tariff quotas are not affected by the measure to set that the import duty on maize, sorghum and rye.
The EU has bound duties for all cereals set under the GATT agreement. However, for some cereals, the applied rates are different from the bound one. The system originates in the Blair House Agreement between the United States and the EU and involves setting tariffs on the basis of individual world reference prices for specific cereal types. The mechanism is triggered automatically. The duty is fixed on the basis of the difference between the effective EU intervention price for cereals multiplied by 1.55 and a representative cif (i.e. cost, insurance and freight) import price for these cereals at the port of Rotterdam.
The import duty for maize, rye and sorghum resulting from that calculation became positive from July to November 2014 at a value of €5.32 per tonne. Since 8 November 2014, the duty has been set at €0 per tonne. Since 1 July 2011 (2011/12 marketing year), it has been decided that the representative cif import price for sorghum and rye would be equal to the representative cif import price for maize. Accordingly since that date, the import duty for sorghum and rye has been equal to the import duty for maize and is therefore also set at €5.16 per tonne as of this week.