The suspension is a response to "tight supplies in world cereals markets” said the EU, with the preferential tariffs of 12 €/tonne and 16 €/tonne for wheat and barley respectively to be reduced to zero for the volumes permitted under the quota
While grain prices have risen worldwide, those in Europe have grown particularly fast, inflated by the region's relatively thin export surplus, compared with the US, and its geographical position.
Multiple production setbacks in Germany, Russia and Canada compounded by the recent flooding in Australian have sorely reduced milling wheat quantities.
And European wheat prices have seen impressive rallying with new contract highs being set by the Matif exchange. “Matif March 2011 contract prices have gained 12 per cent since early January to €274 per tonne with the nearby spot value now having almost doubled since the mid-way point of 2010,” reported analysts Rabobank in their monthly commodities review for February.
The European Flour Millers Association had pressed the Commission for reduced duties on low and medium quality common wheat amid fears of dwindling carry over stocks within the EU.
Speaking after the Management Committee vote today, Dacian Ciolos, Commissioner for Agriculture and Rural Development, said he expected the proposal to “reduce tensions on the European cereals market.”
He commented that the Commission had an obligation to do intervene to “help ease the situation until the end of the marketing year."
The formal regulation is set to be published in the Official EU Journal next week, said a spokesperson for the EU.