Brussels, 21/01/2005 (Agence Europe) - The European Union's Cereals Management Committee decided on Thursday to open a tender for the granting of refunds for the export of 2 million tonnes of wheat from the free market 9in other words not from the EU's intervention stocks). This market intervention measure is expected to come into force at the end of January 2005, once it has been published in the Official Journal with the first contracts granted in February. This long-awaited restoration of refunds will help wheat producers compete in the cut-throat global market. When the tender is running, it will be the first time refunds are granted for the export of wheat since June 2003.In October 2004, the Commission made a similar decision for barley exports, but until now it had resisted calls for refunds to be restored for wheat, despite strong pressure from some Member States, mainly France but also Austria and Poland.
The Commission comments that the new refunds 'will aloe EU exporters to be present on the market in the current exceptional circumstances. The EU had a very large wheat harvest tin 2004 (125 million tonnes compared with 98 million tonnes in 2003) and EU exporters are having increasing difficulties competing in the world market because of the recent considerable fall in the value of the dollar - in which cereal prices are quoted - compared to the euro. The alternative would have been a rapid build-up in intervention stocks which could not be avoided because the Community is obliged to buy the quantities that are offered into intervention. However, this would have been considerably more expensive, not least because these stocks cannot be disposed of in the foreseeable future.' A spokesperson for Agriculture Commissioner Mariann Fischler-Boel said that 'the granting of export refunds in no way lessens the EU's commitment to the Doha Development Agenda to phase out refunds, on condition that its trading partners follow suit and phase out their export support as well.'
Some wheat producers comment that the actual effectiveness of the new measure will depend on the actual size of the export refund granted by the Commission and the demand for wheat for the remainder of this harvest. Reuters quotes a wheat farmer asking how much and to whom the refunds would be made available, adding that fierce competition from Argentinean wheat should be used as a reference in calculating the size of the EU's new wheat refunds.