Maize, sorghum and rye import duties updated by the European Commission

Maize, sorghum and rye import duties updated by the European Commission

In light of an ample supply and low prices for maize worldwide, the automatic mechanism calculating import duties was triggered, setting as of today import duty on maize, sorghum and rye at € 5.27 per tonne. This will ensure that European producers are not put at a disadvantage in the current market conditions.

The revised tariff, published on 27 April 2020 in the Official Journal, is calculated according to EU regulation 642/2010. It explains that the import duty for the three cereals is based on the difference between a European reference price and the world benchmark for maize – the US price, calculated as cif maize price (i.e. cost, insurance and freight included) at the port of Rotterdam.

The US maize price is declining significantly due to the collapse of oil prices, which led to a drop in bioethanol fuel demand in the US (maize being the main raw material for ethanol production). In parallel, a record maize harvest is expected in 2020/2021 at a global level. The freight costs also have fallen due to a drop in energy prices. As a result of the combination of these effects, US cif market prices for maize at the port of Rotterdam fell and stood at € 149.84 per tonne compared to € 162.24 a year ago.

Import duties

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 duty is fixed on the basis of the difference between the effective EU intervention price for cereals multiplied by 1.55 (€ 157.03 per tonne) and a representative cif (i.e. cost, insurance and freight) import price for these cereals at the port of Rotterdam. This mechanism does not leave any margin for neither the level of the duty nor the date of fixing: it is triggered automatically.

Since 1 July 2011 (2011/2012 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.

The latest import duties for maize, sorghum and rye were in force between August 2017 and March 2018 (between €5 and €10 per tonne). Since 3 March 2018 and until today, the duty was set at €0 per tonne. The import duties are now fixed at € 5.27 per tonne, and will apply until the automatic calculation lead to a new figure.

The individual tariff quotas are not affected by today’s measure.

Related links

EU crops market observatory

EU cereals, oilseeds, protein crops and rice policy

O artigo foi publicado originalmente em Comissão Europeira.

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